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Generative AI will be a key determinant for the success or failure of a startup in the near future, believes Will Poole, Managing Partner at early to growth stage venture capital firm, Capria Ventures.

The firm, which announced the close of its $100 million Fund II in September 2023, has been working closely with its portfolio companies to implement generative AI-led solutions to increase the Total Addressable Market (TAM) and efficiency. 

Last September, Capria merged with its Indian counterpart, Unitus Ventures. It now has over 350 startups in its portfolio across India, Southeast Asia, Latin America, the Middle East and Africa. From its latest fund, the firm plans on backing 20-25 early growth stage tech startups.

“We screen every company we look at, for both their current implementation of Gen AI, and potential implementation. Our view is that a business that can use Gen AI and doesn’t will ultimately fail, compared to its competitors who will be picking it up and running with it. They will get the benefit of a larger TAM, lower cost of operations and everything else,” Poole tells YourStory. 

The firm is working with existing and new startups in its portfolio, along with a four-person development team overseeing the use of Gen AI implementation and building rapid prototypes. Of them, two are based in India, Poole tells YourStory. 

Why Gen AI is key for investment bets

According to Poole, Gen AI will help democratise access to the internet for non-English speakers, opening up information, commerce and other interactions – especially in the Indian context. The technology will also benefit the youth. 

“The youth of India are growing up now with Gen AI just like the previous generation grew up with access to digital…This will create a generational shift with the power of information, employment opportunities available to India’s youth on par with anywhere else,” Poole says. 

He further added that the venture capital players too were more inclined to back companies that have AI integration as a core strategy. 

While founders may not always know where to get started on Gen AI-integration, the approach at prototyping solutions and implementing them has helped Capria’s portfolio companies improve efficiencies. 

Gen AI for scaling business

“To get started, we created four teams with two members each who would come up with ideas for implementation of Gen AI across functions. The problem statements included integration of Gen AI in curriculum and pedagogy, personalised level of participation and disrupting Masai,” Prateek Shukla, CEO and Co-founder at skilling startup, Masai School.

Founded in 2019, Masai School offers skilling courses across full-stack web development, backend development, data analytics, mobile development and software testing and automation.

The startup currently uses its solutions for AI Interviewer to mimic real-life interview scenario, Smart LMS (Learning Management System) for personalised learning and LevelUp, which matches recruiter to a potential candidate. 

Shukla adds that the Capria team helped Masai connect with teams from Microsoft and Meta to work on potential solutions. 

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For BharatAgri, farm input ecommerce and agri advisory platform, the adoption of Gen AI has helped it improve efficiency and speed of response.

The Gen AI integration with its chatbot has automated response to all queries, reducing the number of people needed for its advisory platform. Secondly, the integration of order status of farm inputs with ChatGPT has helped BharatAgri update queries on tracking and use of certain products, unrelated to crop advisory. 

“As of today, nearly 65% of our queries are answered by the bot. We also use Microsoft’s AI models to translate our automated responses from Marathi, Hindi and English to other languages for farmers ordering for inputs from Rajasthan, UP and Bihar,” Siddharth Dialani, Co-founder and CEO at BharatAgri tells YourStory. The platform also uses AI tools for nearly 60% of its product catalogue. 

For Bengaluru-based math learning platform CueMath was already working on some solutions around AI integration for the platform, which was sped up with collaboration with Capria.

“We were building a Talk Meter to analyse real-time the length for which a teacher and a student are speaking to determine the ideal zone. This is already in use. We are testing out a teacher co-pilot which uses real-time and non-real-time intelligence and nudges to improve outcomes,” says Manan Khurma, Founder and CEO. 

He added that another integration was to use AI tools to create new content for students on the fly based on the student’s current area of interest. “For example, if two students are learning fractions but one is interested in  astronomy and the other in wildlife, we try to see how best can the concept be taught using their area of interest,” Khurma says. 

He added that Cuemath also works with inputs from a five-member team based in Boston, as part of Cuemath Learning Labs who are at the forefront of integrating AI for the startup. 

The road ahead for Capria

With the $100 million fund set to close by mid-2024, Capria will continue to invest in broader themes of fintech, agritech and job tech. 

“We have a broader view of climate tech including businesses which help reduce food waste in addition to being a supply chain player for fruits and vegetables, asset light business in the EV space and others,” says Poole. 

The new Global South Fund II will invest nearly 60% of the corpus in India and has backed companies including Kueski, Agrofy, MAX and Paymob across Mexico, Brazil, Nigeria and Egypt.