India’s Neysa bags $30M to compete with global AI hyperscalers

Even though India isn’t at the forefront of the global AI innovation battle, demand for AI in the country is growing as businesses seek efficiencies and tech companies promote AI developments as a cure-all. The South Asian nation is projected to have an AI market touching $17 billion by 2027, according to a joint report by the IT industry body Nasscom and consulting firm BCG.

Neysa, an Indian startup led by seasoned tech entrepreneur Sharad Sanghi, aims to leverage this growth opportunity by offering its AI solutions to local and multinational businesses in the country.

The Mumbai-based startup provides AI and machine learning infrastructure and platform as a service to enterprise customers based on their requirements. It also includes dedicated machine learning operations and infrastructure consulting teams to help customers find the relevant size for their infrastructure, and to fine-tune or customize the models they choose.

Before founding Neysa with his former colleague Anindya Das in 2023, Sanghi spent over 27 years at his previous venture and data center provider, Netmagic, which Japan’s NTT Data acquired in 2016. He told TechCrunch that he intended to focus on cloud infrastructure and AI in 2022 but was unable to do so. He resigned as the managing director and CEO of Netmagic in June 2023 to start fresh with Neysa.

“I started at Neysa with a view of providing infrastructure as a service, platform as a service, inference as a service, the services layer around ML, as well as the platforms that we need for developers,” he said in an interview.

Neysa initially started as an infrastructure service provider and launched its flagship platform, Velocis, in July to provide on-demand access to computing infrastructure. However, it plans to expand the product lineup by launching its developer platform and inference-as-a-service before the year-end. The startup is also working on developing an “observability for better management” of its infrastructure and securing AI workloads, Sanghi said.

With its entire suite of offerings getting ready, Neysa is looking to compete with global hyperscalers, including the typical cloud service providers such as AWS, Google Cloud Platform, and Microsoft Azure, as well as the new-age contenders like CoreWeave and Lambda Labs. Sanghi asserted that the startup differentiates from the existing players by offering “flexibility” in its models.

“We can offer both public cloud and private clusters. It’s also the open-source nature of our offering. All our platforms are built on open-source platforms… so there’s no lock-in for clients,” he stated.

The startup’s consultation service also aims to attract local businesses, which often find it challenging to get the appropriate infrastructure without spending thousands of dollars.

“Very often, clients come to us and say that they want so many GPUs… and when we really look at the requirement, they don’t need half the amount they had asked,” Sanghi said.

Neysa has raised $30 million in an all-equity Series A round co-led by its existing investors NTTVC, Z47 (formerly called Matrix Partners India), and Nexus Venture Partners. This follows up the startup’s $20 million seed round earlier this year.

The fresh funding, Sanghi said, will augment Neysa’s infrastructure, enhance its R&D, and broaden go-to-market. The funds will also set the base for the startup to launch its integrated Gen AI acceleration cloud service.

The startup currently has a headcount of 55 people, which it will grow by adding more engineers and staff to expand direct and indirect sales.

Neysa currently has around 12 paying customers and runs about six large proof-of-concepts. As much as 70 percent of its entire customer base has opted for the private cluster, while the remaining 30 percent is on a public cloud, Sanghi said.

While Sanghi didn’t disclose the names of Neysa’s customers, he said the startup caters to broadly three categories: research institutes, AI-native startups, and enterprise customers, initially in the banking, manufacturing, and media sectors.

Neysa’s current customer base is in India, though Sanghi said the startup does plan to enter global markets with its next round of funding — talks for which have already started, and it is expected to close in the next six to nine months.

He did not reveal the exact amount Neysa seeks to raise in its next round, though he stated that it would be “in an order of magnitude more than what we’ve currently raised.” The startup also plans to raise debt to fulfil the growing GPU and other infrastructure requirements.