The question of where global capital is headed is no longer theoretical it is actively shaping how investors allocate, how governments position themselves, and how companies are built. What emerges from recent conversations with global investors is not a single narrative, but a set of converging insights: capital is becoming more selective, more technology-driven, and increasingly ecosystem-focused.
At the centre of that shift sits India.
“India is the most interesting market for us”
For Tomoharu Urabe, Managing Director, Investment (India), MIXI Global Investments Inc. the investment thesis is already clear.
Contents hide“While we evaluate opportunities across Europe and Asia, India stands out. The startup ecosystem is stronger than many regions, and the market size creates real depth.”
His observation reflects a broader trend global investors are not just entering India, they are committing to it. Firms from Singapore and beyond are setting up operations on the ground, intensifying competition and deepening the ecosystem.
“It’s a self-reinforcing cycle. More investors come in, the ecosystem strengthens, and that attracts even more capital.” What makes India distinctive is not just scale, but continuity.
Unlike smaller markets that see sporadic bursts of funding, India offers sustained opportunity across sectors and stages.
AI is expanding the investment lens
Artificial intelligence is central to this shift but not in the way earlier hype cycles suggested.
Neeraj Gupta Founder & Investor, Chapter AI Ventures describes a recalibration in investor thinking “AI is not replacing traditional investment it’s expanding it. The focus has shifted from technology to market opportunity.”
In practical terms, this means investors are no longer impressed by AI as a standalone proposition. Instead, they are asking how it is applied. “AI creates a level playing field. It can automate large parts of work in sectors like legal tech or medtech. But the real question is can you dominate the market?”
This shift has also revived sectors that had cooled, such as edtech, where AI is unlocking new use cases and attracting fresh capital.
At the same time, investor behaviour is becoming more disciplined.
“Before the pandemic, we focused heavily on technology and business models. Now we look at whether a company can scale and own its space. AI is an enabler, not the core differentiator.”
“You need a system that allows failure”
For Joel Rozada Founder, The Techno Creatives Ventures, the conversation around capital flows often misses a fundamental point: innovation is inherently inefficient. “You can’t judge a region by headline numbers. AI has skewed the perception large rounds make it look like capital is flowing everywhere, but it’s often concentrated.”
What matters instead is ecosystem depth.
This is where India’s advantage becomes structural. A large base of startups enables experimentation at scale but only if supported by capital across all stages.
“Innovation means failing fast. You need many bets, because most won’t work. Without that, you don’t get real breakthroughs.”
Rozada also points out that not all innovation can be accelerated. Some technologies like quantum computing or neuroscience take time. You need patient capital and a full funding pipeline he emphasizes.
The new moat: Data over technology
Johan Lilja, Founder and Chief Executive Officer of Velory frames the shift more starkly. “The cost of building technology is approaching zero. That changes everything.”
If building is no longer the constraint, differentiation must come from elsewhere.
“It’s now about distribution, data, and brand. And among these, data is the most critical.”
Access to unique, high-quality datasets is emerging as the defining competitive advantage. It is what makes AI models effective and defensible. India, with its scale and digital adoption, is well positioned.
But Lilja points to an emerging tension AI agents will start replacing junior and mid-level roles. Economies need to adapt to that shift.
The implication is clear advantage not static. Even markets with strong fundamentals must continuously evolve.
The Middle East playbook: Speed and state intent
Shaji Ul Mulk, Founder and CEO, Mulk Holdings offers a contrasting model one where government action accelerates ecosystem development. “In the UAE, AI is being implemented from the grassroots level starting in schools and extending into industry.”
The region is not just investing in software, but in physical transformation. We’re seeing AI-driven modular construction, building infrastructure like data centres at unprecedented speed.
“This integration of policy, capital, and execution is what is attracting global investment.”
“When government intent aligns with innovation, it reshapes the entire ecosystem.”
AI: Dominant, but not absolute
Despite AI’s prominence, investors are careful not to overstate its role. There is broad agreement that AI is attracting the largest share of capital but also recognition that much of it is concentrated in a few infrastructure players.
“If you break it down, only a limited number of bets are happening at the infrastructure level,” one investor notes, pointing to the dominance of large AI platforms. There is also a growing awareness of past cycles. “We’ve seen this before with blockchain. AI is real, but the hype is stabilising.”
Investors are now focusing on durability business models that can withstand rapid technological change, rather than those built on short-term momentum.
Emerging markets: Opportunity meets constraint
AI is lowering barriers to entry, making emerging markets more competitive. But structural challenges remain. Gupta identifies two key constraints. First is data especially in sectors like healthcare, where it’s regulated and fragmented. Second is infrastructure compute and data centres are still expensive.
India’s advantage lies in its scale of data and culture of business innovation. But to fully capitalise, these bottlenecks must be addressed.
Lilja adds another layer trust.
“For global companies, especially in Europe, there are concerns around compliance and data security. Frameworks need to be in place.” Without this, emerging markets risk being seen as high-potential but high-risk.
India’s challenge: Converting interest into action
Despite strong investor interest, execution remains uneven. Urabe points to a common friction: “Many investors want to enter India, but they don’t know how. The market is complex.”
His advice is practical:
“Spend time in the country. Build relationships. And most importantly find local partners.” There are also smaller, but impactful, issues. Even processes like visas shape perception. These details matter.
Mulk reinforces the point by drawing comparisons:
“In the UAE, you can set up a company in minutes with a license and bank account. That’s the level of efficiency global investors now expect.”
He also highlights a gap in follow-through although he says high level engagements are strong, but momentum often drops afterwards. That needs to change.”
The operational reality of building across markets
For founders, the differences are stark.
Setting up a company in India can take weeks. In Canada, it can take minutes. In Germany, months. In Sweden, it is fully digital.
These differences are not just administrative they affect how companies allocate time and talent.
“If startups need to dedicate resources to navigating processes, it reduces their ability to focus on building,” one investor notes.
For early-stage companies, that trade-off can be critical.
The deep tech dilemma
One area where India still lags is deep tech funding. Consumer businesses attract capital relatively easily. Deep tech quantum computing, robotics faces longer timelines and uncertain returns, making investors cautious.
Gupta offers a framework for founders navigating this challenge “Physics, Chemistry, Mathematics.”
“Physics is the business opportunity. Chemistry is the founder’s ability to communicate and inspire. Mathematics is valuation.”
His point is that fundraising is not purely analytical it is also narrative-driven. You need to create urgency and belief. And for deep tech, you must target the right investors those who understand the space.
Capital will follow capability
What emerges from these conversations is a clear pattern. Global investment is no longer driven by geography alone. It is driven by ecosystems where technology, data, policy, and execution come together.
India is firmly in that conversation. The interest is real, the opportunity significant.
But the next phase will depend on something more fundamental: the ability to convert potential into performance.
Because in a world where capital is increasingly mobile, it will not just flow to opportunity it will stay where it can scale.
Disclaimer: The views expressed in this article are those of the author/authors and do not necessarily reflect the views of ET Edge Insights, its management, or its members.
