mumbai : India has yet to produce a social media giant, but investors continue to pump in money. The hope now lies in whether Indian startups can leverage artificial intelligence (AI) to build bumper apps.
Since the beginning of this year, five AI-driven social product startups have received a total of $27.8 million in seed and Series A rounds, as well as one undisclosed round, according to data from research platform Tracxn. ing. social platform Plutus, social media apps Hunch and Explurger, equity-focused social platform OpiGo, and professional social networking platform Medial.
“We are building a model on our platform that learns user behavior and delivers nudges tailored to the user’s needs,” said Opigo founder Devansh Mehta. “Our new feature uses AI to provide guidance on everything, acting as your personal pocket advisor.” From finding the best loan rates to tax-saving ideas and investment strategies. ”
Investors are betting on the AI phenomenon, with at least two of them, 100X.VC and WEH Ventures, reworking their social media investment strategies to incorporate AI.
100X.VC CEO Vatsar Kanakiya said the fund has shifted its fundraising focus from companies with social graphs to companies with AI-driven feeds and community-driven products. A social graph is a network of connections between users that includes likes, shares, comments, and other forms of interaction. Think Facebook, Instagram, and other genres.
“Our main argument is that the social graph is not as important as it used to be in social products,” Kanakiya said, adding that endless AI-driven feed streams are now critical. Very few people actually visit the “Following” tab these days. The focus is on the ‘Me’ tab, but it’s all AI-driven, so it doesn’t matter who you follow. Similarly, on Instagram, there will be less algorithm clutter on your main feed. ”
100X.VC has a history of investing in social startups, including Mauka, a professional networking startup that closed in 2022, Moving, a cryptocurrency-based social trading platform, Offside, a social platform for cricket fans, and Quriverse, an anime community platform.
Generative AI, or GenAI-driven interactions, is interesting right now for Rohit Krishna, a general partner at WEH Ventures, who already raised a $1.6 million seed capital round last year for Gen Z-focused social app Slick. I am leading.
“Consumer interest in social platforms typically spikes when new forms of interaction emerge, from Facebook’s ‘walls’ to Instagram’s filters to TikTok’s ability to easily create short videos. . Now powered by GenAI, multiple new forms of content creation and creative expression are possible. ”
He also believes that even if a platform starts with a social angle, it can “gravitate towards becoming more social over time as more users start using the platform.”
Pearl Agarwal, founder and managing director of Eximius Ventures, which has invested in several startups in this space, including anonymous social network Hood and location-based social startup Shuru, says AI will help evaluate social startups. He said he is ready to become a key focus in the process.
“AI makes it easy to generate high-quality content across a variety of languages. This extends to creating multimodal content that seamlessly incorporates images, videos, and GIFs. It plays a pivotal role in content distribution by leveraging unstructured data to understand and effectively target untapped audience segments. This increases reach and engagement potential for social startups. will increase,” said Agarwal.
“The advent of stateful AI offers the possibility of AI companions, which can significantly increase user retention within social platforms,” she added. Stateful AI is an AI model that maintains persistent memory or state between sessions.
The social networking space has seen the rise and fall of many startups over the past few years. This includes global social media platforms like BeReal and ClubHouse, which have made waves in India, as well as his Sharechat, a domestic unicorn struggling with mounting losses. ShareChat losses widened by 38%; INRIt was $4.064 billion in FY23, according to filings with the Registrar of Companies (RoC).
Still, investor money continues to flow in. Krishna cites two reasons behind this. “One is that this is a typical venture-category investment, where the outcome is either-or, and if the platform is successful, there is a lot of money to be made. Even if it’s big, consumers are always looking for exciting ways to connect with each other, which means some of the market can always be taken away (Snap makes $4.6 billion a year, TikTok US makes $16 billion). As a result, the market was taken away from meta),” Krishna said.
“Social networks are a long-term strategy and India is a different market because the ARPU (average revenue per user) in our country is much lower,” Kanakiya explained. Beyond advertising, can you do microtransactions? There are many problems to solve when building social media in India. ”
These VCs have been driven by the hope that someday a startup will emerge from their portfolio. Mr. Kanakiya pointed out that eventually there will be someone who can build a social media network that is uniquely Indian. “So this is definitely a huge opportunity,” he said.
Krishna added, “We believe we will see large-scale platforms forming at the culmination of technological change, such as mobile images (Instagram), mobile video (TikTok), and perhaps GenAI.”
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