Venture capital firms are increasingly betting on smart home appliance market with startups like Beyond Appliances, Upliance, AroLeap, On2Cook, DrinkPrime, Aurm and Karban securing funding in recent months.
For years, the adoption of smart home technologies— connected lighting, security systems and kitchen appliances — remained low in India compared to the US and China, where startups in the segment have long received significant funding. Indian VCs had largely stayed away due to concerns over product-market fit. Before Covid, around 30 startups in the space shut down due to lack of traction. However, post-pandemic, the scenario has changed as investors see a growing market for smart appliances.
Startups like Atomberg, which expanded from smart fans to a broader range of appliances, and DrinkPrime, a smart water purifier company, have demonstrated the sector’s promise. Atomberg’s revenue from operations rose 31.5% to `848 crore in FY24 from Rs 645 crore a year ago, highlighting strong growth in the segment. The company is backed by investors such as Temasek Holdings, Steadview Capital, Jungle Ventures and Inflexor Ventures.
According to Tracxn data, India currently has 142 smart appliance startups, which have raised a total of $36.1 million in equity funding since 2021. Prominent investors in the space include Alteria Capital, Omidyar Network, Khosla Ventures, Fireside Ventures, Draper Associates, Titan Capital and Rainmatter. Additionally, food delivery firm Zomato entered the market with an 8% equity stake in Byondnxt Smart Home and a prior $5-million investment in Mukunda, a startup that provides smart kitchen equipment for B2B customers. Other players like MyGate have also ventured into the space with smart locks, predicting a surge in demand for such products in modern urban households.
“Smart appliances are finally being built in the right direction. Instead of just pushing high-tech solutions, brands like ours are focusing on adding real value to everyday appliances,” said Eshwar K Vikas, CEO and co-founder of Beyond Appliances.
According to Redseer, the Indian smart home appliances market has grown rapidly, with penetration increasing from 4% of a $3 billion market pre-Covid to nearly 10% of a $10-billion market in 2023. By 2028, it is projected to reach 25-28% of a $15 billion market.
“Advancements in IoT, AI, and cloud integration, along with lower production costs and increased competition, have made smart appliances more accessible and reliable. As consumer trust and affordability rise, we believe the segment is poised for significant growth in the coming years,” said Ankur Bansal, co-founder and MD at BlackSoil. His firm is actively exploring opportunities in the space, focusing on startups with scalable models and strong product differentiation.
From a venture debt perspective, Bansal added, smart appliance startups are particularly attractive due to their high working capital needs. “Debt financing helps bridge the gap between payments from retailers and timely payments to manufacturers and suppliers, allowing these businesses to scale without diluting equity.”
