Want to be Hyderabad's go-to institutional investor, says Kalyan Sivalenka

The managing director of the Hyderabad Angel Fund says they are open to joining hands with other prominent VCs, and are looking to back mature businesses and entrepreneurs that are based in the city

With its maiden fund already launched, the Hyderabad Angel Fund aims to position itself as the go-to institutional investor of the city, Kalyan Sivalenka, the managing director of the fund, said. In a conversation with Udisha Srivastav, he delved into the fund's aim, its investments to date, the sectors it plans to invest in, the fund cycle, and why it is targeting Series A and Series B companies.

 

Q: What was the aim of starting a fund? What is the core problem you were trying to solve? 

A: The Hyderabad Angel Network has been in existence for quite some time, helping very early-stage companies, probably writing the first checks. Here, a group of angels would come together and decide to vote for or against a particular opportunity. However, we thought it's time to institutionalise the way we invest and get access to better, larger deals. We thought we could tap into what has been built over time, in terms of experience, network, and understanding of certain sectors.

 

Q: What is the fund size? Will there be co-investments as well? 

A: It's a Sebi-registered Category I AIF fund, which is worth Rs 100 crore with a Rs 50 crore green shoe option. We want to be the first institutional investor in companies and sign larger checks. We also prefer coming along with other prominent VCs and co-invest, so the actual participation can be more meaningful. Along with the co-investments from our Limited Partners (LPs), we are looking to commit a higher amount of capital, and it could go up to Rs 200 crore-Rs 250 crore. This way, we still have the flexibility of an early-stage fund, but bring some expertise of a late-stage fund.

 

Q: What are the timelines for raising money and deploying it? 

A: It has been a year since we got our licence. Proactively, we have gone to the market in the last 6-7 months to fundraise. We already have overall commitments of around Rs 65 crore-Rs 70 crore and are looking for final closure with about Rs 100 crore by February-March 2026.

We have already committed to three investments. One we have announced in STAN (a social gaming platform), and the others we will announce soon.

 

Q: What's the average ticket size of your investments? What sectors are you focusing on? 

A: Our average ticket size is around Rs 5 crore-Rs 8 crore. However, in the first two companies, we have put in Rs 5 crore from the core fund, but along with the co-investments, we have invested almost Rs 17.5 crore. This shows the strength of our LPs and our ability to cut larger cheques than what typically comes from the core fund.

We are sector-agnostic, so the fund plans to invest in 15-20 startups across emerging and high-growth sectors, including Generative AI, Gaming, SpaceTech, Drones, HealthTech, Consumer Tech, FinTech, Enterprise SaaS, and Sustainability.

 

Q: Who are the LPs for this fund? 

A: The bulk of our investments have indeed come from members of the Hyderabad Angel Network. We have more than 25-30 LPs who have committed to the fund. Besides the angel network, we have some large commitments from a few large family offices in Hyderabad.

 

Q: You said that you are more keen on investing in companies that are at pre-Series A or Series B. Why not tap into pre-Series A companies or seed-stage companies and be the first institutional investor? 

A: The portfolio construction is very important from a fund management perspective. We already have an ecosystem (Hyderabad Angel Network) that typically serves the pre-Series A and even seed-stage companies. So, from the fund, we are looking at more mature businesses and entrepreneurs to back. Also, the risk-return ratio we look at from the fund is slightly different from what we look at from the angel network.

 

Q: You said you wish to be a go-to institutional investor in Hyderabad? Why not India? 

A: I think most of our LPs are from Hyderabad. So, if people want to access institutional investors, we want to become the go-to place for them. There is nothing particular about the city, and money has no colour but we should always start from home.