The central government may acquire a 1-2% stake in AI startup Sarvam following its ongoing $300 million funding round, according to inc42.com. Sarvam recently announced raising $234 million as part of this round, which values the company at $1.5 billion, making it India’s 130th unicorn. The government’s stake stems from compute infrastructure provided under the IndiaAI Mission, which was compensated through compulsorily convertible debentures (CCDs) that are now converting into equity.
The funding round is led by HCLTech, which invested $150 million for a 10.46% stake, with participation from Bessemer Venture Partners, Khosla Ventures, and Peak XV Partners, inc42.com reported. The government’s equity stake reflects the conversion of CCDs issued in exchange for compute infrastructure support. An anonymous government official explained that the Centre’s small stake accounts for the support provided under the IndiaAI Mission. Sarvam and the Ministry of Electronics and Information Technology did not respond to queries by the time of reporting.
Sarvam is among a select group of AI startups chosen under the IndiaAI Mission to develop indigenous, multilingual, and domain-specific foundation models. The government’s stake, estimated to be worth between $1.5 million and $3 million based on the valuation, highlights the state’s involvement in nurturing AI innovation. The round’s lead investor, HCLTech, and other prominent venture capital firms underscore growing investor confidence in India’s AI sector, which is rapidly expanding with startups focusing on foundational AI technologies.
Sarvam’s $300 million funding round is ongoing, with $234 million already raised, according to inc42.com. The company’s valuation at $1.5 billion places it among India’s top AI unicorns. The government’s stake conversion from CCDs is a notable example of public-private collaboration under the IndiaAI Mission, which aims to boost indigenous AI capabilities.