Artha India Ventures announces first close of ₹500 cr Artha Venture Fund II

The Rs 500 crore micro VC fund will invest in 36 early-stage startups across premium consumption, fintech, AI, and deep tech themes

Venture capital firm Artha India Ventures on Tuesday announced the first close of ₹250 crore for its second early-stage micro VC fund, Artha Venture Fund II. The fund targets a total corpus of ₹500 crore with a ₹100 crore green-shoe option.

 

Investing in 36 early-stage startups across key themes

 

From this fund, the firm will invest in 36 seed-stage startups across four themes — premium consumption, fintech infrastructure, applied artificial intelligence (AI), and deep tech. It will deploy ₹4 crore in initial cheques and double down with follow-on investments of ₹8-16 crore.

 

Overall, the fund targets 15–20 per cent ownership in its top portfolio companies and will operate on a four-year deployment cycle. It will selectively back startups that are post-seed, post-revenue, and raising ₹4–10 crore rounds.

 

Early-stage funding slowdown offers opportunity

 

Commenting on the announcement, Anirudh A. Damani, Managing Partner of Artha Venture Fund, said,

"The new fund is launching at a time when the startup ecosystem is undergoing a reset. In the last eight months, barring one, India has recorded fewer than 100 seed investments per month — the lowest in nearly a decade.

 

"More tellingly, the graduation rate from Seed to Series A, historically one in nine startups or around 12–13 per cent over 36 months, has dropped to as low as 5–6 per cent in recent months. That tells you how capital-starved the early-stage investment ecosystem has become."

 

Strong domestic participation in Fund II

 

The fund’s capital base will remain nearly 80 per cent domestic and around 20 per cent global, with 90 per cent of first-close commitments coming from Indian limited partners (LPs) — including family offices and exited founders — and the remaining 10 per cent from international investors.

 

Early backers of the fund include the Shahi Group, Narendra Karnawat (Glance Finance), DSP Family Office, and several founders from Artha’s earlier investments who have since achieved successful exits.

 

‘Tourist founders are gone; serious entrepreneurs remain’

 

"What's exciting for us as investors is that this environment filters out the noise. The tourist founders are gone; what's left are serious entrepreneurs building sustainable, capital-efficient businesses. They are focusing on raising funds from customers before VCs — that's precisely the kind of DNA that builds vintage funds," Damani added.

 

Artha Venture Fund I’s portfolio sets the foundation

 

The first fund includes a portfolio of 32 companies such as Agnikul Cosmos, Everest Fleet, LenDenClub, Daalchini, InstaAstro, and GetWork.