Artha Venture Fund (AVF), India’s first early-stage micro-VC fund, announced the final close of its debut fund at over Rs 220 crore. The fund invests in B2B (business-to-business), B2C (business-to-consumer) and D2C (direct-to-consumer) sectors and D2C enablers. It had targeted raising Rs 200 crore. However, a surge of interest in Indian start-ups and the robust performance of the seed fund’s early investment made AVF overshoot its target and exercise the greenshoe option. AVF is a Category I alternative investment fund that invests in start-ups across seed, pre-series A, and series-A levels of growth.
“Besides exceeding our targeted raise two months ahead of schedule, almost 50 per cent of our first cohort of LPs (limited partners) doubled down on their earlier investments,” said Anirudh A. Damani, Managing Partner, Artha Venture Fund. “The effect of the two pandemic-led lockdowns shook our portfolio founders and our team. However, each one stuck to their task, and our founders responded to each obstacle as an opportunity.”
As a result, Artha’s portfolio-wide revenues grew 3x in 12 months without raising additional capital. “This frugal but explosive growth is what excites us and our investors,” said Damani.
Artha will continue to scout for seed stage deals in its preferred investment themes of D2C, D2C enablers, and B2B. It will invest in 12-15 startups in FY 2021-22.
“Another sleeping giant that has piqued our interest in the last 12 months is the gaming sector, especially for the masses,” said Damani.
The fund had targeted closing the corpus by July 2021 but overachieved its target two months ahead of schedule. Over 50 limited partners (LPs) participated in the fund, with almost half of the LPs increasing their investment commitments in the last 3 months. More than 50 per cent of the investments came from family offices, and from over 20 listed companies participating directly or through promoter entities.
Non-resident Indians (NRIs), high-net-worth individuals (HNIs), super angels, and SIDBI invested the remaining capital. The fund has allocated over 65 per cent of its corpus for follow-on rounds and will make 10-12 seed investments per year.
“I am humbled and grateful for the confidence placed by our investors in our investment and capital deployment strategy,” said Vinod Keni, Growth Partner, Artha Venture Fund. “The increase in commitments by our existing limited partners further validates our execution and the market opportunity.”
AVF had previously announced the second close of Rs 100 crore of the said fund in June 2019. It has invested more than 25 per cent of the total corpus in top startups such as Agnikul, LenDenClub, Kabbadi Adda, HobSpace, PiggyRide and Daalchini. The fund recently reinvested in space tech startup Agnikul’s series-A round and has 6 deals set in the pipeline for the next few months.
AVF has been broadening investment opportunities by engaging with various accelerators across the country. It cumulatively (through associations and directly) plans to support 40 accelerator stage investments through small cheques written from this fund.