PREMJI INVEST IN TALKS TO JOIN EMERGENT FUNDRAISE

Premji Invest is in talks for a potential investment in vibe coding platform Emergent’s $250 million round that will value the company at $1.5 billion, a fivefold jump from the last round, according to people aware of discussions. This comes barely three months after the company raised $70 million from Khosla Ventures and SoftBank, valuing it at $300 million.

The conversation with Premji Invest started last week and it’s currently evaluating the firm, one of the persons said. The ongoing round will see participation by Bengaluru-based investment firm Creaegis, which might co-lead the round with other investors. “The talks are still on to decide the lead investors of the round and details are yet to be finalised,” the person said. The round will also see participation from existing investors.

Premji Invest declined to comment. Emergent did not respond to queries.

Accel is also said to be in early talks to invest in the company. It wasn’t immediately available for comment. Westbridge Capital was in discussions last week, but those might not have progressed, said one of the people cited.

Westbridge Capital managing partner Sandeep Singhal denied the development in an email.

The country is seeing significant interest in AI investments, potentially minting two unicorns this year. ET had earlier reported that Sarvam, which develops Indic language models, is in talks to raise over $300 million, valuing it at close to $1.5 billion with participation from US-based growth equity firm Glade Brook Capital, Nvidia, Amazon, HCL Technologies, Bessemer and Prosperity 7 Ventures.

Emergent was founded in 2024 by brothers Mukund and Madhav Jha and has raised total funding of about $100 million from investors such as Khosla Ventures, Prosus, Lightspeed Venture Partners, Together Fund, Y Combinator and SoftBank Vision Fund. The company said it has reached $100 million in annual recurring revenue within eight months, becoming one of the fastest growing AI startups.

Also Read: ETtech Explainer: What Emergent’s ARR reveals about AI’s numbers game

One of the reasons for investor interest is that few companies are able to scale that fast, said one of the people cited. Besides, Indian companies present an attractive option, said a Bengaluru-based investor. Average seed rounds are in the range of $5-7 million in US-based AI companies, particularly those based in San Francisco.

However, multiple founders and investors have flagged lower gross margins, retention and defensibility of vibe coding platforms’ business models as the AI models of companies like Anthropic could offer stiff competition. Vibe coding allows users to create applications by using natural language prompts rather than having to write code.

Emergent cofounder Mukund Jha said previously that it’s been able to hold on to clients.

“We are built for users who want to build serious applications, with real business needs, and want to digitise their business and monetise such as small and medium businesses and entrepreneurs,” cofounder Mukund Jha had said previously. “For these users, we are seeing retention improving.”

While vibe coding has been around for a while, it’s a tough nut to crack, Jha had said.

“Coding is only 20% of the process, and there are others such as debugging, testing, deployment, production and scaling with security,” he added.