In 2025, a new fault line has emerged in India’s startup ecosystem: the AI-native versus the AI-agnostic. One group is growing 3–7× faster, raising capital at 4–6× higher valuations, and achieving profitability in half the time. The other group is quietly falling behind — not because they lack ambition or talent, but because they are trying to compete in a world where artificial intelligence has become table stakes.
Table of Contents
The 2025 Performance Divide — By the Numbers
Metric (2025)
AI-Native Startups
Non-AI Startups
Gap
Median YoY Revenue Growth
168%
41%
4.1×
Median Valuation Multiple (Revenue)
18–26×
4–7×
4–5×
Average Time to Profitability
22 months
48+ months
–56%
Funding Success Rate (Series A+)
68%
23%
3×
Gross Margin (median)
72%
48%
+50%
Customer Acquisition Cost Reduction
62% YoY
11% YoY
5.6×
Employee Productivity (Revenue/FTE)
$420K
$118K
3.6×
Source: Inc42 + Tracxn AI Report 2025, n=4,800 startups
The Two Indias in 2025
AI-Native India (2025)
Non-AI India (2025)
Uses AI in core product (generation, automation, prediction)
