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The Livspace Reset, PM Modi’s Push For AI, and Activate Partners NVIDIA

The Livspace Reset, PM Modi’s Push For AI, and Activate Partners NVIDIA

Plus fundraising news about Myelin Foundry, Portkey, and Euler Motors

February 23, 2026

The 1,000 layoffs at Livspace signify more than a shrinking headcount. It’s a corporate skin-shedding and a brutal, public break from the old way of doing business.

Once valued at $1.2 billion, Livspace has cut roughly 12% of its workforce and saw co-founder Saurabh Jain exit after 11 years. Officially, this was framed as a transition to an “AI-native agentic organization.” Unofficially, it looks like a unicorn confronting gravity.

The context matters. Livspace hasn’t raised external capital since its $180 million round in 2022. Reports of a potential valuation reset, from $1.2 billion to nearly $700 million, have hovered in the background. Meanwhile, FY25 revenue grew 23% to ₹1,460 crore, but the company still lost ₹242 crore. It spent ₹1.2 to earn every ₹1. Employee benefits alone were ₹590 crore - 34% of total expenditure.

Cutting 1,000 employees isn’t symbolic. It is arithmetic.

Assuming average mid-level CTCs of ₹8-12 lakh, annualized savings could touch ₹80-120 crore, enough to materially narrow EBITDA losses ahead of a planned IPO and reverse flip to India. The AI pivot is strategic, yes. But it is also the fastest lever to protect runway.

Livspace pioneered the “full-stack interiors” dream: 120+ experience centres across 95+ cities, proprietary 3D visualization, managed execution, and a 146-point quality check. That model worked when offline trust and design access were scarce.

Today, design is free.

RoomGPT, Interior AI, Spacely AI - any freelancer can now generate photorealistic renders in seconds. Livspace itself admits AI has cut visualization time by 60%. If you can automate your own designers, so can your competitors.

Meanwhile, competition has changed shape.

HomeLane has turned EBITDA positive and expects FY26 profitability. Urban Company, already profitable with ₹239.8 crore net profit in FY25, has entered interiors via “Revamp.” Asian Paints’ Beautiful Homes leverages 150,000+ dealer touchpoints and 350+ centres - distribution Livspace can’t replicate without burning capital.

The moat is eroding from three sides:

AI democratizes design.

Horizontal platforms extend into interiors.

Legacy physical showrooms become fixed-cost traps.

The showroom paradox is central. What was once a conversion engine is now a lease obligation. Even with the FOFO model shifting some burden to franchisees, flagship tier-1 stores remain expensive liabilities in a funding winter.

The real question is strategic identity. Livspace was built on a premium, human-led, full-stack experience. But if AI handles 60-70% of design, sales, and ops, what remains differentiated? Quality control? Project management? Brand trust?

History offers warnings. Houzz peaked at $4 billion before retrenching. WeWork proved what happens when tech narratives collide with fixed physical assets.

Livspace’s likely path is a leaner hybrid: AI core, reduced workforce, selective flagship stores, heavier FOFO footprint, IPO at a valuation haircut. Survival is probable. Unicorn premium is not guaranteed.

Livspace is betting that automation can convert a fixed-cost-heavy contractor into an asset-light platform. If it works, it becomes India’s first AI-native interiors major. If it doesn’t, it becomes a case study in how fast moats evaporate when software eats design.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Tama Maza Avi Che?”: Livspace Fires 1,000 Employees, Cofounder Quits

Home interiors platform Livspace has cut 1,000 jobs, roughly 12% of its workforce, after rolling out AI agents across sales, design, operations and marketing over the past six months.

The company says automation trials proved efficient enough to shrink teams, framing the move as a structural reset rather than a slowdown. Adding to the churn, cofounder and India CEO Saurabh Jain has stepped down to pursue personal interests.

“Modi Hai Toh Mumkin Hai”: PM Modi Meets Deeptech, AI Startup CEOs As 88 Nations & Organizations Sign The New Delhi Declaration On AI

PM Narendra Modi met deeptech and AI startup CEOs, pressing for population-scale innovation and a sharper AI push in agriculture, while stressing data governance and curbing misinformation.

At the same time, 88 countries and organizations including the US, China, Russia, the UK and the EU signed the New Delhi Declaration on AI, backing open-source tools, secure systems and energy-efficient infrastructure.

“Hum Saath Saath Hai”: Activate Partners NVIDIA To Provide Technical Assistance To AI Startups

Early-stage AI investor Activate has partnered with NVIDIA to give founders hands-on technical backing as they move from idea to execution.

Startups will get access to NVIDIA’s Nemotron open-source models to build agentic AI platforms, along with training and engineering support. The chipmaker will also help spot high-potential teams across India, tightening the pipeline between raw ambition and deployable AI products.

“Sapne Dekhna Achhi Baat Hai”: Edtech Startup Klassroom Files DRHP For BSE SME IPO

Edtech startup Klassroom has filed its DRHP for a BSE SME IPO, with a fresh issue of up to 19.89 Lakh equity shares and an OFS of up to 4.66 Lakh shares.

The company plans to use the proceeds to pare debt and double down on its AI and ML tech stack. A slice will also go toward content development and marketing as it looks to scale beyond the classroom into a more tech-driven learning play.