<\/p>\n
Since the beginning of this year, five startups with AI-driven social products have received cumulative funding of $27.8 million in seed and Series A rounds in addition to one undisclosed round, according to data from research platform Tracxn. They are social platform Plutus, social media apps Hunch and Explurger, stock-focused social platform OpiGo, and professional social network platform Medial.<\/p>\n
\u201cWe are building a model that learns user behaviour on our platform and provides customised nudges to suit user needs,” said Devansh Mehta, founder of Opigo. \u201cOur new feature will act as your personal pocket advisor, utilising AI to provide guidance on everything from finding the best loan rates to tax saving ideas and investment strategies.”<\/p>\n
Investors are putting their bets behind the AI phenomenon, with at least two of them, 100X.VC and WEH Ventures, reworking their social media investment strategy to include AI.<\/p>\n
Vatsal Kanakiya, CEO of 100X.VC, said the fund has shifted its funding lens from companies having social graphs to ones that either have AI-driven feed or a community-led product. A social graph is a network of connections between users that includes likes, shares, comments and other forms of interactions. Think Facebook, Instagram, and others of their genre.<\/p>\n
\u201cOur thesis is largely that the social graph is no longer as relevant in social products as it was,” said Kanakiya, adding that endless AI-driven stream of feed is now key. \u201cThink about the Twitter feed, that’s what it has become where very few people actually go to the \u2018following\u2019 tab now. Attention is on the \u2018for you\u2019 tab, which is all AI-driven, so it doesn’t matter who you follow. Similarly, in Instagram, the main feed has become less interspersed with algorithms.”<\/p>\n
100X.VC has a history of investing in social startups, including in professional network startup Mauka that shut shop in 2022, cryptocurrency-based social trading platform Moving, social platform for cricket fans Offside, and anime community platform Quriverse, among others.<\/p>\n
For Rohit Krishna, general partner at WEH Ventures, generative AI or GenAI-driven interactions are now of interest, having already led an investment round of $1.6 million in seed capital last year in GenZ-focused social app Slick.<\/p>\n
\u201cConsumer interest in social platforms usually spike when there is a new form of interaction, starting from the Facebook \u2018wall\u2019 to filters on Instagram to the easy ability to create short videos on TikTok,” said Krishna. \u201cNow, driven by GenAI, multiple new forms of content creation and creative expression are possible.”<\/p>\n
He also believes that platforms could start without any social angle and \u201cgravitate to become social over time as more users start using it”.<\/p>\n
Pearl Agarwal, founder & managing director of Eximius Ventures, which has invested in multiple startups in the space like anonymous social network Hood and location-based social startup Shuru, said AI is poised to be a key focus in assessing startups within the social space.<\/p>\n
\u201cAI enables the generation of high-quality content across various languages effortlessly. This extends to the creation of multimodal content, incorporating images, videos, and GIFs seamlessly\u2026Moreover, AI plays a pivotal role in content distribution by harnessing generative capabilities to understand unstructured data and effectively target untapped audience segments. This enhances the reach and engagement potential of social startups,” said Agarwal.<\/p>\n
\u201cThe advent of stateful AI introduces the possibility of AI companions, which can significantly boost user retention within social platforms,” she added. Stateful AI is an AI model that maintains a persistent memory or state across sessions.<\/p>\n
The social network space has seen the rise and fall of many startups in the last few years. This includes global social media platforms like BeReal and ClubHouse, which created a lot of buzz in India, or home-grown unicorn Sharechat, which is struggling with mounting losses. ShareChat’s losses widened 38% to \u20b9<\/span>4,064 crore in FY23, according to its filings with the Registrar of Companies (RoC).<\/p>\n Yet, investor capital continues to flow in. Krishna cites two reasons behind this. \u201cOne is that it\u2019s a typical venture category investment where the results are binary\u2014if the platform is successful, they make a lot of money. The second reason is, no matter how large the incumbent, a part of the market can always be taken away because consumers are always looking for exciting ways of connecting with each other (Snap makes $4.6bn per year and TikTok US makes $16bn, both of which took market away from Meta),” said Krishna.<\/p>\n \u201cSocial networks are a long-term play and India is a different market, because our ARPU (average revenue per user) is much lower,” explained Kanakiya. \u201cSo, companies also have to figure out unique ways of monetizing\u2014can you go beyond advertising, can you do microtransactions\u2014there are a lot of problems to solve to build social media in India.”<\/p>\n The hope that at some point, a startup from their portfolio would click has kept these VCs going. Kanakiya noted that eventually, there is going to be somebody who can create an India-specific social media network. \u201cSo, it is definitely a very large opportunity,” he said.<\/p>\n Krishna added, \u201cWe believe large platforms are formed at the cusp of technology changes like mobile images (Instagram), mobile videos (TikTok) and now, possibly, GenAI.”<\/p>\n \u00a0<\/p>\n Milestone Alert!<\/strong> Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed \u2013 it’s all here, just a click away! Login Now!<\/strong><\/a>\n<\/p>\n
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