Amid a funding winter, micro VCs staked a lot on early-stage India deals keep up the startup burning
A host of micro venture capital (VC) funds are making a beeline for investments in India as early-stage deals in the country keep the startup story burning bright. Last month, Speciale Invest, a venture capitalist focused on early-stage investments in India, launched its first growth fund worth over $24 million to focus on deep science and enterprise technologies.
Among other firms, BoldCap in April launched its second fund with a corpus of $25 million to invest in 15 to 20 early-stage startups, while Chanakya Fund Trust closed its maiden $12.5 million sector-agnostic fund to tap startups and small and medium enterprises.
CapFort Ventures is understood to be awaiting the approval of the Indian capital markets regulator to launch its first fund. "Entrepreneurship is booming in India," said Abhimanyu Bisht, general partner at CapFort Ventures. "There are lots of great ideas at the early stage that require hand-holding beyond the capital. That is what we are targeting to do. The promise of high returns that investments in some of these high-potential startups offer have made it a welcoming asset class."
According to proprietary data collated by DealStreetAsia, the share of early-stage deals in total funding has been growing quarter by quarter. This is even as startups across the world, especially in the growth stages, are staring at a funding winter, amid macroeconomic headwinds.
Typically, micro VCs have a corpus of less than $30 million. They primarily operate in the pre-seed and seed space, with only a few participating in post-seed rounds. Investors in these funds primarily include high-net-worth individuals (NHIs), family offices, funds of funds, listed companies and corporates.
Industry watchers expect the number of micro VCs to increase in India as household savings for HNIs move more toward financial assets from physical ones. According to a report by Bain & Co -- IVCA, micro VCs mushroomed in 2022 with the number of such funds growing from 65 to over 80 in 2021-22.
At least 13 micro VC funds had hit the market by September to raise capital and provide much-needed risk capital, as well as hands-on mentorship, to early-stage startups in the country. According to experts, they are now giving tough competition to the angel networks.
"The ability of angels to do follow-on checks is very small. Most angels do not come back from Series A onwards," Anirudh A Damani, managing partner at Artha Venture Fund had told DealStreetAsia earlier. "For follow-on rounds, startup founders have no option but to go out and find a new set of investors, who are more professional in their approach and ensure a steady flow of capital to run day-to-day operations. As a result, the market is shifting towards micro VCs."
Among other firms, BoldCap in April launched its second fund with a corpus of $25 million to invest in 15 to 20 early-stage startups, while Chanakya Fund Trust closed its maiden $12.5 million sector-agnostic fund to tap startups and small and medium enterprises.
CapFort Ventures is understood to be awaiting the approval of the Indian capital markets regulator to launch its first fund. "Entrepreneurship is booming in India," said Abhimanyu Bisht, general partner at CapFort Ventures. "There are lots of great ideas at the early stage that require hand-holding beyond the capital. That is what we are targeting to do. The promise of high returns that investments in some of these high-potential startups offer have made it a welcoming asset class."
According to proprietary data collated by DealStreetAsia, the share of early-stage deals in total funding has been growing quarter by quarter. This is even as startups across the world, especially in the growth stages, are staring at a funding winter, amid macroeconomic headwinds.
Typically, micro VCs have a corpus of less than $30 million. They primarily operate in the pre-seed and seed space, with only a few participating in post-seed rounds. Investors in these funds primarily include high-net-worth individuals (NHIs), family offices, funds of funds, listed companies and corporates.
Industry watchers expect the number of micro VCs to increase in India as household savings for HNIs move more toward financial assets from physical ones. According to a report by Bain & Co -- IVCA, micro VCs mushroomed in 2022 with the number of such funds growing from 65 to over 80 in 2021-22.
At least 13 micro VC funds had hit the market by September to raise capital and provide much-needed risk capital, as well as hands-on mentorship, to early-stage startups in the country. According to experts, they are now giving tough competition to the angel networks.
"The ability of angels to do follow-on checks is very small. Most angels do not come back from Series A onwards," Anirudh A Damani, managing partner at Artha Venture Fund had told DealStreetAsia earlier. "For follow-on rounds, startup founders have no option but to go out and find a new set of investors, who are more professional in their approach and ensure a steady flow of capital to run day-to-day operations. As a result, the market is shifting towards micro VCs."
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