The latest funding round for the Bengaluru-based foundational model startup will see strategic investors Nvidia, Amazon and HCLTech participate, along with venture capital firms Bessemer Venture Partners and Prosperity 7 Ventures. Existing investors Peak XV Partners, Lightspeed Venture Partners and Khosla Ventures are also expected to participate in the round, said one of the persons cited above.
Glade Brook, which has backed Indian startups such as Zepto, Pixxel and Pronto, is planning to invest $20-25 million in Sarvam, one of the persons briefed on the matter said.
ETtech“Term sheets have been signed… and the final structure of the round is being finalised,” said one of the persons cited. “Around $150-200 million will be invested by the three strategics (Nvidia, Amazon and HCLTech).”
Bessemer could invest $50-70 million from its US funds because there are restrictions on the entry valuation for the firm’s India fund.
“However, Bessemer’s India team will play a key role in managing the investment,” said another of those cited, adding that Sarvam had initially been looking to raise $250 million but this has increased to more than $300 million.
Bessemer, which has backed Anthropic in the US, is leading the financial and technical due diligence for this round, the person added. The firm is expected to be the largest new financial investor in the round.
Prosperity 7 Ventures is backed by the venture arm of Aramco — Saudi Arabia’s majority state-owned oil and natural gas company. The investor is expected to plough $40-50 million into Sarvam, while the remaining $40-50 million is likely to come from Peak XV, Lightspeed and Khosla Ventures.
Founded in 2023 by Pratyush Kumar and Vivek Raghavan, Sarvam is positioning itself as an AI platform for sovereign use cases, focused on building India-first large language models (LLMs) and infrastructure tailored to local languages and data.
Sarvam did not respond to queries sent by ET.
A spokesperson for HCLTech said, “As a policy, we do not comment on market speculation.”
The Saudi company said, “Aramco declines to comment.” Glade Brook said in an email that it “has no comment.” An Amazon spokesperson said, “We don’t comment on rumours and speculations.”
Nvidia, Bessemer, Peak XV, Lightspeed and Khosla Ventures did not respond to ET’s queries.
Strategic backing
“The strategic investors are an important part of this funding puzzle,” said one of the people cited. “Nvidia is important because it gets Sarvam access to GPUs. Amazon is important from a hyperscaler standpoint, and HCLTech has a large enterprise and government business where it will be looking to deploy solutions that Sarvam has to offer.”
Speaking at ET’s AI Conclave and Awards in February, Sarvam cofounder Vivek Raghavan said the company is primarily working with enterprises with a largely B2B approach.
“We’re also working with governments and different sectors. These are the primary channels we are focused on right now,” he said, referring to the startup’s monetisation strategy.
He had also underscored that India’s AI opportunity lies in a well-orchestrated system of small models that are cheaper, more energy-efficient and faster.
“We need to focus on solving real business problems that matter to India, and show that we can solve them better and more effectively,” he had said. “It’s very clear that the US and China will be frontier AI powers. There are a few countries in the middle and India is one of them.”
Sarvam is also ramping up commercial traction, announcing multiple partnerships with Indian and global firms to deploy its LLMs. It has tied up with companies such as Qualcomm, HMD Global, Bosch and Nokia to integrate its models into enterprise and device-level use cases.
On the need for capital, Raghavan had said, “As a company, we can do a lot by deploying the models we’ve already built. That requires capital, but not billions of dollars… and that’s something I think we can achieve. As for building a frontier model, that’s a strategic call someone needs to take… but it’s not that we can’t do it.”
At the India AI Impact Summit in February, Sarvam unveiled its first homegrown foundation models — Sarvam-30B and Sarvam-105B — supporting 22 Indian languages. The startup also introduced a suite of products, including Sarvam Vision (OCR and multimodal capabilities), Sarvam Dub for translation and dubbing, and the Indus beta app for mobile and web. It also debuted Sarvam Kaze AI-powered smartglasses.
Sarvam was last valued at $110 million in 2023, when it raised capital from Peak XV, Khosla Ventures and Lightspeed.
“Owning an LLM stack that is homegrown is going to be as critical as having a nuclear weapon,” one of the persons involved in deal discussions said. “The government wants to spend on artificial intelligence beyond the regular aspects such as automation and digital public infrastructure, and is looking to move into areas like defence, space research and cybersecurity, where Sarvam has a big opportunity.”
That makes the proposition attractive to investors.
Sarvam’s funding will add to investors doubling down on larger AI startups this year, reflected in the jump in valuations of these companies. In February, US alternative asset manager Blackstone announced it was leading a $1.2 billion investment in cloud infrastructure startup Neysa — in what became the largest-ever funding round in India’s AI space.
The fundraise, split equally between a primary equity round and debt, ascribed an enterprise valuation of $1.4 billion to Neysa. Prior to this, in January, vibe-coding startup Emergent raised $70 million in a transaction led by Khosla Ventures and SoftBank that more than tripled its valuation to $300 million.
Neysa, like Sarvam, was founded in 2023, while Emergent was launched last year.