Speciale Invest: A VC fund that bets on disruptive tech at the seed stage

Among its investments are aerospace manufacturer Agnikul, space tech startup AstrogateLabs, The eplane Company, which aims to build all-electric flying taxis

With startup funding and big numbers hogging limelight, focusing on niche area for investing is a rarity, and this is exactly what seed stage venture capital firm Speciale Invest does.

Based in Bengaluru and Chennai, it was co-founded in 2017 by Vishesh Rajaram and Arjun Rao. While Rajaram had stints at PwC, ICICI Bank and private equity fund VenturEast, Rao has worked in the past at Yahoo!, ibibo Web, and Travelyaari.com.

The firm backs entrepreneurs that use disruptive technologies to find innovative solutions that make an impact.

“We essentially invest in enterprise technologies i.e. technologies that are used by business or industries--both software and hardware. We are looking to work with founders who leverage convergence of more than one stream of technology to create solutions that are both hard to create and strongly needed by a large and rapidly growing B2B market. Our past investments include Conversation AI (artificial intelligence) led SaaS (software as a service), VIsion AI lead SaaS, developer infra tools, alternate batteries, space tech, and robotics,” the co-founders told Business Standard in an email interaction.

Among their investments are aerospace manufacturer Agnikul, space tech startup AstrogateLabs, The eplane Company, which aims to build all-electric flying taxis; conversational AI firm True Lark, CynLr Robotics, which builds the eyes and brain for robotic arms and cloud automation platform TotalCloud.

Speciale Invest raised its first fund in 2018 and has invested in 14 cutting-edge startups so far, with an average deal size of sub-$0.5 million. Out of 14 startups, it has two exits, and 70 per cent of its remaining 12 portfolio companies have gradually expanded and raised value.

The focus on investing only in the seed round comes from the thrill of the journey that these startups embark on. “Our team DNA leans quite heavily on investing and operating early stage businesses, we enjoy the ambiguity and the progress of a 0 to 1 journey and believe that we bring meaningful insight to our founder,” the co-founders said.

It now has a second fund, which they had expected to be around Rs 100 crore, but it got oversubscribed, and closed over Rs 120 crore. The founders expect it to reach Rs 140 crore.

The fund founders share their own learning and mistakes with these startup founders, and value add largely by facilitating customer introductions (particularly for industrial technology), early team building and capital raising. 

Overall, the firm has so far invested and advised over 40 companies across India, Israel and Silicon Valley.  

“All three markets have very distinct and unique strengths. Talking about India, there is both a large consumer marketing exploding into existence and a large and pre-existing industrial market that is prime to adopt newer technologies - here we see companies building for India and building out of India for the world. Israel has the benefits of being the “Startup Nation” for decades and the ecosystem is mature and largely focusing on building products for US and European markets (given that their domestic consumption market is relatively small),” Rajaram and Rao said.

On the overall scenario in the Indian startup world, Speciale Invest feels the appetite for risk and startup building is strong at both founders and investor levels, and there is scope to build globally relevant firms out of India.

“The pandemic had created a ripple effect, a few sectors have been affected, a few sectors have been created and a few sectors have non-linearly grown / expanded. In short, we have seen our group of founder partners adapt in the most brilliant way to deal with the impact of the pandemic on the team, customer and business environment front,” they said.