The country’s startup deal activity and early-stage technology are set to witness a new wave of investments with many venture capital firms like Lightspeed Venture Partners and Accel Partners ready to raise fresh capital and other funds.

Other groups of funds from the United States, China, Japan and South Korea like General Catalyst, Morningside, Akatsuki Entertainment Technology, Qiming Ventures, Korean Investment Partners, and a bunch of family offices are also now co-investing alongside larger funds. VCs like Steadview Capital, Ribbit Capital, Falcon Edge, Venture Highway, Shunwei Capital, Beenext and Mirae Asset Management who were already investing in the market have now boosted the volume significantly.

According to the sources, Accel which is already an investor in tech startups like Freshworks, Flipkart, and Swiggy is expected to raise $500 million by the end of this year. Sequoia Capital is also capitalizing its seed-stage programme, Surge with $200 million of funding.

Chiratae Venture Partners (Formerly known as IDG Venture Partners) has planned to pull in $300 million whereas Kalaari Venture Partners and Lightspeed Venture Partners both have set a target of $200 to $250 million this year.

Waterbridge Ventures has already begun the process of raising its second fund while India Quotient, a Mumbai-based firm is looking to close the $60 million fund that it raised by September. As per the estimates set by the industry, many other series ‘A’ focus funds have a target of collectively raising $300 to $350 million.

At a time, when the Indian startup ecosystem is seeing a boom with rising valuations and industry stakeholders, this new trend can be attributed to a stable government and strong macro-economic fundamentals. As per the statistics by Tracxn, a startup industry tracker, the investments into Indian startup system has increased by 30% to $4.7 billion in the first half of 2019, when compared to last year’s corresponding period.


Karthik Reddy, the co-founder of Blume Ventures which is ready to close its third fund at $80 million this year, said, “With each cycle, the early-stage VC ecosystem is getting larger in terms of the number of funds. Even with a generalist early-stage tech fund like ours, the team members are getting more specialised in the sectoral thesis that they track and invest into.”

Another finding from the data sourced from Tracxn revealed that most of the founders are seeking to raise bigger first cheques ranging to $1.2 million and looking for funds from institutional investors rather than angel rounds.

Limited Partners (LPs) that include corporates, pension funds, sovereign funds, fund of funds, endowments, high net-worth individuals and family offices are also a typical source of funding. These LPs are actively eyeing the improved paper valuations and attractive secondary exits. Venture capital investments slowdown in China and the uncertainty around the United States presidential election along with fear of market downturn have forced funds to increasingly and actively approach LPs.

Sarbvir Singh, the managing partner at Water Bridge Ventures said, “LPs (both foreign and domestic) are now warming up to the Indian VC asset class, buoyed by the return of capital from recent exits and the overall optimistic view that the Indian VC story is finally becoming real.”