Zerodha’s Nithin Kamath says AI-first pitches are no longer a funding differentiator
Zerodha co-founder Nithin Kamath says founders leaning on generic AI-led pitches risk turning off investors. He urged startups to foreground customer value, the business problem being solved and defensible competitive advantages.
What happened
Zerodha co-founder Nithin Kamath said AI-first startup pitches have become generic and may deter investors, urging founders to focus on customer value, business
Why this matters
Evaluate startup targets and partners on differentiated capabilities, proprietary assets and strategic fit rather than AI branding alone.
What to watch
- Term sheets and pitch feedback increasingly cite traction, revenue quality and distribution rather than AI differentiation.
- Seed rounds favor vertical SaaS and workflow products with named enterprise or retail customers over horizontal AI assistants.
- Investors ask more frequently about model dependency, inference costs, data ownership and vendor concentration.
- Rising reports of AI pilots failing to convert into paid production deployments.
- Large software platforms bundle comparable AI features, weakening standalone startup differentiation.
- Reframe fundraising materials around the customer pain point, quantified ROI, retention evidence and route to repeatable distribution.
- Document defensibility beyond model access: proprietary data rights, embedded workflows, regulatory expertise, channel partnerships and switching costs.
- Use AI as an enabling capability rather than the headline unless it demonstrably creates an otherwise unattainable product advantage.
- Expect investors to request customer references, cohort metrics, gross-margin trajectory and evidence that AI-related costs decline with scale.
- For retail-facing startups, prioritize proof that AI improves conversion, inventory turns, personalization accuracy, shrink reduction or customer-service costs.