Artha Ventures to mark highest-ever exits in 2025: Anirudh Damani

Among the recent exits are cloud telephony provider Exotel, where Artha clocked a 114x return, and investment platform Lightyear, which yielded 20x returns

With around eight late-stage divestments planned by 2025-end, venture capital firm Artha Ventures is on track to record its highest-ever annual exits in a year, says its managing partner Anirudh Damani. The firm has already completed six exits this calendar year.

 

Among the recent ones are cloud telephony provider Exotel, at a 114 times return, and investment platform Lightyear, which yielded 20 time returns.

 

Damani said the decision to offload late-stage bets is driven by inflated valuations. “We intend to continue selling from the late-stage portfolio, as valuations are no longer aligned with reality. Looking at the initial public offering (IPO) ecosystem, barring Eternal, the startup portfolio had a public debacle. Some companies were down about 50, 60, or even 70 per cent from the IPO price. Even if it has recovered, it’s still below its IPO price," he explained.

 

Citing Ola and Gensol Engineering, Damani added that only a handful of valuations have strong fundamentals. “Otherwise, when large valuations go wrong, there is no bottom to that.”

 

However, Artha plans to deploy capital into fresh bets.

 

“We are redeploying this capital back into early-stage firms. In fact, we will probably be deploying a little more aggressively from this year onwards, as we see the valuations have tempered. I think investing in early-stage startups is currently going through its most sluggish phase since I began investing in India in 2011,” Damani said.

 

He noted that in 2022-2023, founders got easy capital access. Investors now demand revenue growth for the same level of funding. “The capital has gotten a lot smarter, and given the way the early-stage ecosystem is currently struggling, it’s a really good time to be investing in great ideas and execution,” Damani added.

 

In total, the firm has invested in nearly 140 startups, with 34 exits. “We have backed five unicorns, 12 companies which are now valued at over ₹2000 crore. They were all seed investments. We manage somewhere around ₹1200 crores of committed capital," Damani said.

 

As part of Fund I, the firm made investments in 32 startups, including space-tech company Agnikul and fleet operating company Everest Fleet, among others. The fund, which had a total corpus of ₹225 crore, was closed in December last year. Another fund, Artha Select, is also expected to close in the coming weeks. It had a target size of ₹330 crore. Currently, the firm is setting up another seed fund.