Neysa, an artificial intelligence (AI) startup based in Mumbai, has successfully raised $30 million in a Series A funding round, co-led by notable investors including NTTVC, Z47 (formerly Matrix Partners India), and Nexus Venture Partners. This funding follows an earlier $20 million seed round and is aimed at enhancing Neysa’s infrastructure, boosting research and development efforts, and expanding its market presence. Founded in 2023 by Sharad Sanghi and Anindya Das, Neysa aims to democratize access to scalable AI solutions for various sectors, leveraging the burgeoning demand for AI technologies in India.

Aiming for Growth in AI Solutions

The Indian AI market is anticipated to reach approximately $17 billion by 2027, driven by increasing demand from businesses looking for efficiency and innovative solutions. Neysa's founder, Sharad Sanghi, views this growth trajectory as an opportunity for his startup to establish a strong foothold in the competitive landscape of AI infrastructure and platform services. With plans to achieve a staggering 200-300% growth in the upcoming year, Neysa aims to almost triple its revenue, further underscoring its commitment to meeting the rising demand for AI solutions.

Sanghi, who previously founded data center services provider Netmagic, intends for Neysa to provide comprehensive AI and machine learning infrastructure to local and multinational enterprises. The startup's flagship offering, Velocis, launched in July 2024, enables clients to access high-performance computing infrastructure on demand. By addressing the specific needs of their clients, Neysa aims to ensure security across both cloud and edge environments.

Meeting Market Demand

Neysa caters to a diverse clientele, currently serving around 12 customers from various sectors, including AI-first digital natives, media and entertainment companies, and service providers. The startup has noted a significant interest from both domestic and international markets, with particular traction coming from regions like the United States, Europe, Japan, and the Middle East. As the company looks to expand its reach, it plans to prioritize overseas markets in the near future while continuing to grow within India.

Sanghi highlighted that Neysa is uniquely positioned to meet the burgeoning demand for AI infrastructure. He stated, “Next year will be much bigger than this year, not only because we will have a full 12 months of operations but also because the demand-supply dynamics are in our favor.” He explained that the current shortage of graphics processing units (GPUs) has led to increased demand for their services, giving Neysa a competitive advantage in the market.

Differentiating Through Flexibility

What sets Neysa apart from its competitors, such as AWS, Google Cloud Platform, and Microsoft Azure, is its flexibility in service offerings. The startup provides both public cloud and private cluster options, built on open-source platforms, which eliminates vendor lock-in for clients. This approach allows Neysa to tailor its solutions to the specific requirements of each customer, a feature that is particularly appealing to local businesses that often struggle with appropriate infrastructure investments.

Sanghi remarked that many clients initially overestimate their GPU needs. By offering consultation services, Neysa aims to assist businesses in optimizing their infrastructure investments, thus fostering a more sustainable growth model for its clients. “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 noted.

Future Aspirations

The new funding will enable Neysa to scale its infrastructure, enhance R&D capabilities, and further develop its go-to-market strategy. With plans to introduce a generative AI acceleration cloud service, the startup aims to solidify its position as a key player in the AI infrastructure landscape.

Currently employing a team of 55, Neysa plans to expand its workforce by recruiting additional engineers and sales staff. As the startup continues to grow, it is also exploring opportunities to raise debt to meet increasing GPU and infrastructure demands, indicating a strategic approach to scaling its operations.

Sanghi anticipates that the next funding round, expected to close within the next six to nine months, will significantly surpass the amounts raised to date. Neysa's ongoing discussions for this round signal the startup's intent to continue scaling in an increasingly competitive market.

Neysa’s recent funding milestone is a testament to the startup's potential in the rapidly evolving AI landscape. By focusing on infrastructure, flexibility, and customer-centric solutions, Neysa is well-positioned to capture a substantial share of the growing Indian AI market. As demand for AI technologies continues to surge, Neysa's commitment to innovation and scalability may play a pivotal role in shaping the future of AI infrastructure both in India and beyond.