VC firm Good Capital launches $50 mn fund to back start-ups leveraging AI

Good Capital, a seed-stage venture capital fund focused on India, on Friday announced a $50-million fund to back start-ups that use artificial intelligence (AI) for distribution, personalisation or business operations.

The fund, which has a greenshoe option of $25 million, will in the next four years invest in upcoming firms that have an average ticket size of $1.5 million. A greenshoe is an over-allotment option that allows venture firms to raise capital over and above the target corpus.

“Integrating AI is now table stakes for any start-up. Much like the platform shift to mobile in the past, the success of tech businesses will depend on how they leverage AI”, said Arjun Malhotra, co-founder, Good Capital. “This isn’t an AI-focused fund, as much as a recognition of a land-grab moment where start-ups leveraging AI in intelligent ways will have the right-to-win.”

Good Capital was founded in 2019 by Arjun and Rohan Malhotra and it is an early investor in unicorns like Meesho and LEAD School.

“We invest with deep conviction by being lead investors for every investment we make. ...when time is precious for start-ups, Good Capital helps entrepreneurs get into business quickly, rather than spending weeks cobbling together small amounts to raise their first round,” said Rohan Malhotra.

The firm’s maiden fund has made investments in companies like OrangeHealth, which raised funding from General Catalyst and Accel Partners, and SimSim, which was acquired by Google and SolarSquare.

“As one of their longest portfolio relationships, I can attest to Rohan and Arjun’s bottom-up approach. They worked with us through several iterations of what eventually became Meesho’s business model and played a role in guiding us and helping us with challenges,” said Vidit Aatrey, chief executive officer (CEO) and co-founder of Meesho.