In 2020, when Akash Agarwal got down to construct Pibit.ai, he had envisioned an insurtech firm serving the trade at giant. Well being, motor, industrial: AI would automate underwriting in a number of areas.
Not anymore.
“You danger spreading your self too skinny,” Agarwal recollects being advised by buyers. “Anthropic will change you with only one wrapper.”
By November 2025, when he closed a $7 million Collection A spherical from startup accelerator Y Combinator and tech-focused, seed-stage fund Arali Ventures, Pibit.ai’s focus had narrowed to a single underserved section: industrial insurance coverage.
Pibit’s trajectory captures a serious shift underway within the AI startup ecosystem. Funding continues to be flowing, however what qualifies as fundable is shrinking.
“The bar for what’s a ‘good AI firm’ has gone up,” stated Arun Raghavan, a managing associate at Arali Ventures. “Fewer corporations cross that bar, and much fewer find yourself elevating significant quantities of capital.”
In India, that shift is seen on the earliest levels. At the same time as enthusiasm for AI has remained robust, the variety of seed-stage startups receiving funding fell by roughly 30% between 2024 and 2025, in response to Tracxn, an information supplier. Collection A offers dropped much more sharply. But the dimensions of early-stage cheques grew—to $351 million in 2025 from $269 million in 2024.
