11 Apr AI and Social Startups: An Indian overview
Banner image generated using ChatGPT, OpenAI, April 11, 2025
As the world is anticipating increased economic growth from the AI revolution, it is a good time to survey the status of use of AI in Indian Social Startups. Social Startups while eager to adopt tech are generally not pioneers in doing so. However, this varies with specific sectors they work in and the nature of their social mission.
Before we proceed, lets clarify what we mean by Social Startups/Social Enterprises. The category of social startups is inclusive. It includes a variety of for-profit enterprise which aim to make social impact through their business models which aim to address unmet social or environmental needs.i These generally are divided in two broad categories – one which works for people at the grassroots or marginalized people [e.g. helping people with disabilities, improve access to clean water for the marginalized] or second, works for society at large [e.g. Environment or Healthcare improvement that have more broad-based impact].
While the use of technology in Social Enterprises is on the rise, there are many challenges too for the same.ii Still social startups using technology as part of their business model is small sub-set of the Tech Startup pool. This is especially true in a developing country like India. We can see this in the overview of AI startups.
Data source:
For this analysis, we will primarily use as source, startups listed on IndiaAI Mission, a Government of India initiative on to “..build a comprehensive ecosystem that fosters AI innovation…”.iii We also look at startups’ portfolios of some of the prominent Tech incubators/stakeholders in India from which we have a curated list of 450+ Social Tech Startups.
AI and Social Startups in India
There are 511 startups listed on India AI mission website as of 4th April 2025.iv A review of the mission of these startups shows that only 59 of these startups fall in the social startups category as defined above. Thus, a meager 12% of the all the AI startups in India seem to have a clear social impact mission built into their business model. [Fig 1]
Fig 1.
Moreover, a sectoral analysis of these startups shows the following trends:
- HealthCare by far dominates with 46% share [28 Startups], followed by
- Sustainability and climate [15] with 24% share and
- Agriculture [11] with 18% share. [Fig 2]
Fig 2.
If we use the above definition of the social startups, at present AI startups in India with a social impact mission are dominated by startups that works for society at large [healthcare, environment] and not by social startups working at the grassroots or for marginalized groups. [such as assistive tech].
We see similar trend in larger dataset too. We have collated a list of 450+ Social Tech Startups collated from select sources [incubators, investors etc.]. While by no means a comprehensive list, it does give a snapshot of social tech startups.
There too when we count only Social Tech Startups, AI startups [including CV, IoT, etc.] form a much smaller sub-set and trend in favor of startups that work for society at large [healthcare, environment] [see Fig 3 and Fig 4]. An overwhelming 76% of AI Social startups come from two sector healthcare and environment. A grassroots social startup like Assistive tech is just 6% of the pool.
Fig 3
Fig 4
Challenges for AI tech
This trend is in line with various challenges faced by social startups like limited resources, lack of awareness and limited access to technology.v There are also other challenges that limit the adoption of technology for developing solutions to social problems. While technology is more amiable to solving social problems at large, they have limited use in solving wicked social problems [like access to good education or clean water] which in themselves arise due the lack of resources and access to [economic, social, and technological] that marginalized communities face.
A recent Goldmans Sachs report on Gen AI highlights how AI tech still is in its infancy. Daron Acemoglu, Institute Professor at MIT, who is sceptical argues that only “a quarter of AI-exposed tasks will be cost-effective to automate within the next 10 years, implying that AI will impact less than 5% of all tasks” and that it will contribute only 0.5% to US productivity and only 0.9% of US GDP growth in the next 10 years. Similarly, GS Head of Global Equity Research Jim Covello points that to recover massive ~$1tn estimated on capex for GEN AI, it must solve complex problems and it at present it is not being built do. He argues, “truly life-changing inventions like the internet enabled low-cost solutions to disrupt high-cost solutions even in its infancy, unlike costly AI tech today.”vi
Note these arguments are for general for-profit businesses. These challenges are even steeper when it comes to Social Tech startups. No wonder then AI-based Social Startups constitute a very small sub-set of AI startups in India.
Conclusion
The integration of AI in Indian social startups is a growing trend, though it remains a small subset of the overall AI startup ecosystem. Only a limited number of AI startups in India focus on social impact, with healthcare and sustainability dominating the sector. These startups primarily address broader societal issues rather than grassroots-level problems, largely due to challenges like limited resources and access to technology. The dominance of healthcare and sustainability sectors indicates a preference for addressing large-scale societal issues. However, the limited focus on grassroots problems highlights the need for more accessible and cost-effective AI solutions.
As AI technology evolves, it is crucial for policymakers and stakeholders to address these challenges by providing resources and incentives that can help social startups leverage AI more effectively. Despite these hurdles, AI has the potential to significantly enhance social impact by solving complex problems, though its adoption is hindered by high costs and limited applicability to certain social issues.
Edited by Ravi Sarkunan.