A new venture capital fund with a target size of INR 250 crore has been established by LC Nueva Investment Partners, a collaboration between Lighthouse Canton in Singapore and Nueva Capital in Delhi.
With a greenshoe option of INR 100 crore, the new LC Nueva Momentum Fund would aim to reach a target size of INR 150 crore. The VC fund will concentrate on making investments in ten to fifteen businesses that are in the Series A and B funding stages. This collaboration created the LC Nueva Fund in 2023, with an INR 350 crore size cap. An official statement claims that since its completion, the fund has had impressive results, with more than half of the companies obtaining additional funding rounds and having an average revenue growth rate of almost 57%.
As of June 30, 2024, Lighthouse Canton, a global asset and wealth management company, was managing assets worth over $3.7 billion. Ashish and Sohil Chand launched Nueva Capital, an investment holding company that oversees $100 million in both the public and private markets.
What is the Greenshoe Option?
During initial public offerings (IPOs), corporations employ the greenshoe option, sometimes called the over-allotment option, to keep the stock price stable in case there is increased demand for their shares after the IPO. In the event of excess demand, it gives the underwriters, who help with the initial public offering (IPO), the authority to issue more shares—usually up to 15% of the initial shares issued. In addition to keeping the share price from soaring, the greenshoe option gives underwriters the chance to repurchase shares at the offer price, which helps stabilize the stock price.
New Focus Areas
The LC Nueva Momentum Fund will now concentrate on three main areas: secondary market investing, neighboring prospects, and reinvesting in already profitable portfolio companies.
“We are well-positioned to successfully navigate the current market dynamics by aggressively chasing secondary opportunities and utilizing the solid connections made through our prior fund,” said Sohil Chand, the founding partner and CIO of LC Nueva Fund. The venture capital business claims that the secondary market in India has grown significantly due to a pressing demand for liquidity and falling valuations.
Sanket Sinha, Global Head of Asset Management at Lighthouse Canton, stated that secondary funds grew at the quickest rate of any asset class globally in 2023.
Portfolio secondaries, in which funds buy out entire General Partner portfolios, have significantly increased in India in recent years. These transactions used to be rare, but as businesses get older, institutional secondary investors are increasingly buying private secondary portfolios. He further explained that in the first half of 2024 alone, secondary share sales accounted for 34% of transactions in the $50–500 million area for big deals.
Venture capital (VC) is crucial in financing startups and small businesses with long-term growth potential. Typically sourced from wealthy investors, investment banks, and financial institutions, VC funding offers several advantages, including no obligation for repayment even in the event of business failure. Additionally, VC firms often provide valuable networking opportunities, aiding startups in marketing and promotion efforts to establish themselves in the market.
VC investment occurs across various stages:
Pre-Seed: At this earliest stage, founders work on shaping their ideas into a viable business plan. Many seek support from business accelerators for initial funding and mentorship.
Seed Funding: This stage marks the launch of a startup’s first product. With no revenue streams, startups rely on VC funding to cover operational expenses.
Early-Stage Funding: Once a product is developed, startups require additional Capital to scale production and sales before achieving self-sustainability. This stage often involves multiple funding rounds, such as Series A and B.
Despite the potential benefits of VC funding, there exists a significant gender gap in this realm, with women-founded startups receiving disproportionately less funding compared to their male counterparts. This disparity underscores the need for dedicated women-centric VC funds, which provide access to Capital and foster supportive investor communities tailored to female founders.
These specialized VC funds are particularly timely for India as the country strives to enhance women’s workforce participation and unlock female entrepreneurs’ economic potential. By highlighting VC funds focused on supporting innovative women-led companies across high-growth sectors, this article underscores the importance of bridging the gender gap in venture capital funding and empowering female founders in India’s startup ecosystem.
StrongHer Ventures – VC Fund Supporting Women Entrepreneurs
StrongHer by Arise Ventures, led by founder Ankita Vashistha, is a leading platform dedicated to empowering early-stage women entrepreneurs with essential resources such as Capital, connections, community, and coaching. Committed to fostering gender diversity and empowerment, the firm invests in women-led tech startups across three key verticals: Consumer, Climate, and Enterprise.
Driven by a passion for supporting visionary founders driving positive change, StrongHer invests in diverse ventures. The firm seeks disruptive companies in the consumer sector that redefine traditional industries and enhance people’s lifestyles. Within the B2B realm, StrongHer directs its investments toward SaaS, DeepTech, and Enterprise ventures across fintech, health tech, and cybersecurity domains, prioritizing innovation and efficiency.
With a notable track record of investments, StrongHer plays a significant role in supporting transformative ventures and driving positive impact across diverse industries.
Saha Fund
FOUNDER
Ankita Vashistha
Founded
2016
Headquarteres
Bangalore, India
Investments
Fitternity, MyAlly, LoveLocal, Shoptimize, and Joules to Watts
Website
www.sahafunds.com
Saha Fund – VC Fund Supporting Women Entrepreneurs
Established in 2014, Saha Fund has emerged as a pioneering global gender lens fund committed to investing in companies that promote the empowerment and engagement of women. Continuously building on this esteemed legacy, the firm is dedicated to establishing a leading platform for women entrepreneurs worldwide.
Acknowledging the importance of operational expertise in scaling early-stage ventures, Saha Fund leverages its strong network and investment acumen to foster growth and success. Saha Fund is steadfast in promoting gender diversity and inclusion and leads the way in championing women-led enterprises, driving positive change in the entrepreneurial landscape.
Value of Funding of Women-Led Startups in India from 2021 to 2023
AWE Funds
FOUNDER
Seema Chaturvedi
Founded
2019
Headquarteres
Troy, United States
Investments
Freshokartz, Remedico, Velmeni, and Agam
Website
www.awefunds.com
Kalaari Capital – VC Fund Supporting Women Entrepreneurs
AWE (Achieving Women Equity) Funds believe in HER power to transform communities, drive sustainable economic development, and deliver superior financial returns. They are an early growth venture fund investing in exceptional value-creating entrepreneurs driving innovations that promote sustainability. AWE, which is based out of the US, said that it has attracted investment support from many international and Indian institutional investors and also from high net-worth individuals.
AWE Funds has aimed to empower 30 million women to gain ‘agency’ by 2030 through a quantitative threshold-based gender lens gating criteria to invest in women-owned, led, or influenced companies. It pursues investments early in an enterprise’s lifecycle (Pre-Series A, Series A equity rounds). Additionally, it seeks to assist companies with the diverse skills of the firm’s investment professionals, strategic relationships, and its global network of executives and advisors to deliver market returns for its investors.
Aastey, Kindlife, Samosa Party, and Creative Galileo
Website
kalaari.com
Kalaari Capital – VC Fund Supporting Women Entrepreneurs
Kalaari Capital is a prominent early-stage, technology-focused venture capital firm renowned for its significant role in the Indian startup ecosystem. Founded and led by Vani Kola, a distinguished Indian venture capitalist, the firm primarily invests in Seed and Series A startups. Their mission is to empower visionary entrepreneurs to develop innovative solutions that revolutionize various aspects of Indian life, spanning work, consumption, and transactions.
Vani Kola, recognized as one of the most influential women in Indian business by Fortune India in 2014, along with Kalaari Capital, is deeply committed to fostering entrepreneurship in the digital economy. They strive to build enduring partnerships with founders, offering unwavering support as they navigate the challenges of building thriving enterprises.
In line with their commitment to gender diversity and empowerment, Kalaari Capital launched the CXXO initiative in 2021. Rooted in Capital, community, and coaching principles, CXXO aims to empower female founders and CEOs in India, enabling them to shape the nation’s digital landscape and drive exponential economic growth.
Beyond providing Capital, Kalaari Capital offers invaluable domain expertise, access to resources, and strategic guidance to the companies it supports. By nurturing disruptive entrepreneurs early, the firm lays the groundwork for their long-term success and impact in the market.
She Capital – VC Fund Supporting Women Entrepreneurs
Established in 2018, She Capital is a pioneering diversity-focused venture fund dedicated to transforming India’s startup ecosystem by providing financial support to female entrepreneurs. Anisha Singh founded She Capital as a unifying force for female founders through its “Together” community, fostering collaboration and support among its members.
Driven to empower the next generation of exceptional female-led businesses, She Capital extends financing to early-stage startups across all industries. A centerpiece of its mission is the “Together” event hosted by She Capital, which catalyzes collaboration and innovation among outstanding founders. With its vibrant atmosphere and picturesque setting, the event serves as a beacon for bright minds, paving the way for female founders in unconventional fields.
At the heart of the “Together” event are insightful discussions led by seasoned entrepreneurs, venture capitalists, investors, and thought leaders in futuristic technologies and AI. Through these engagements, She Capital remains steadfast in its commitment to championing female entrepreneurship and driving positive change in the startup landscape.
Conclusion
In summary, the landscape of venture capital funding for female entrepreneurs in India is experiencing a significant shift. The rise of specialized VC funds dedicated to supporting women-led startups reflects an increasing acknowledgment of female founders’ immense potential and capabilities.
These funds go beyond just providing financial support, offering valuable resources such as mentorship, networking opportunities, and tailored support systems to address the unique challenges faced by women in entrepreneurship. With a surge in capital investment in these initiatives and a heightened awareness of the importance of diversity in the startup ecosystem, India is on track to develop a more inclusive and dynamic entrepreneurial landscape.
FAQs
What are the main stages of venture capital (VC) investment?
The main stages of VC investment are Pre-Seed, Seed Funding, and Early-Stage Funding.
What are the key advantages of VC funding for startups?
VC funding offers no obligation for repayment even in business failure. It also provides valuable networking opportunities to aid startups’ marketing and promotion.
What is the gender gap in VC funding, and how are specialized women-centric VC funds addressing it?
Women-founded startups receive disproportionately less VC funding than male counterparts. Women-centric funds provide access to capital and supportive communities for female founders.
What are the key focus areas and investment strategies of some of the women-centric VC funds mentioned?
Women-centric VC funds have different key focus areas and investment strategies. For example, StrongHer invests in women-led tech startups, Saha is a global gender lens fund, AWE focuses on sustainability-driven innovations, Kalaari’s CXXO empowers female founders, and She Capital supports early-stage female-led startups.
India’s startup ecosystem has been increasing in recent years, with a particular surge in ventures focused on artificial intelligence (AI). These startups are developing innovative solutions that have the potential to transform various industries.
However, building a successful AI-based startup requires a great idea, a talented team, and significant financial support. That’s where venture capital (VC) firms come in.
In this article, we’ll delve deeper into the top VC funds actively supporting India’s young AI startups, providing them with the necessary funding, mentorship, and resources to drive innovation and foster growth in the country’s tech landscape.
RTP Global – Top VC Fund Supporting India’s Young AI Startups
RTP Global has an inspiring history that spans over two decades and is a testament to the power of audacity and determination. The firm was founded by Leonid Boguslavsky, who placed a bold bet on the future of technology and innovation, which has paid off manifold. RTP Global is not just a venture capital firm; it embodies the spirit of entrepreneurship.
The firm’s vision is to identify and nurture visionary founders whose ideas have the potential to transform industries. RTP Global’s investment philosophy is based on swift decision-making, early-stage investments, and deep commitments to portfolio companies.
It is not just about making investments; it’s about forming long-term partnerships and standing by founders through the ups and downs of their entrepreneurial journeys.
Over the years, RTP Global has backed hundreds of founders who share its ambitious spirit. The firm’s portfolio includes some of the most successful tech companies of our time, such as Datadog, Delivery Hero, and Cred.
RTP Global’s unwavering support for its portfolio companies sets it apart from other venture capital firms. RTP Global has helped them achieve their goals and create lasting value by forging strong relationships with founders.
2. Endiya Partners
Founded By
Sateesh Andra, Ramesh Byrapaneni, and Abhishek Srivastava
Founded In
2015
Headquartered At
Hyderabad, India
Website
www.endiya.com
Endiya Partners – Top VC Fund Supporting India’s Young AI Startups
Endiya is a venture capital firm founded with a clear mission to support scalable product companies. The firm has remained steadfast in its commitment to identifying and backing exceptional entrepreneurs with transformative ideas since its inception. Endiya actively seeks entrepreneurs with deep technical expertise and a bold vision for innovation.
What sets Endiya apart from others is its focus on identifying and capitalizing a long-term, market-creating trends ahead of others. This approach is informed by the team’s extensive experience and industry know-how. The firm provides financial support, operational guidance, and strategic insights to its portfolio companies.
Moreover, Endiya’s hands-on approach to investing distinguishes it from other venture capital firms. The team prides itself on being operator VCs, seasoned entrepreneurs, and operators who leverage their collective expertise to partner actively with portfolio companies.
They work alongside founders as true partners and assist them with critical decisions around strategy, hiring, fundraising, and more.
An Explanation Guide for Startup Funding
3. Aeravti Ventures
Founded By
Ashish Sharma and Ashish Aggarwal
Founded In
2022
Headquartered At
Bangalore, India
Website
www.aeravti.com
Aeravti Ventures – Top VC Fund Supporting India’s Young AI Startups
Aeravti Ventures is a SEBI-registered Alternative Investment Fund that is dedicated to providing support to early-stage businesses that not only generate financial returns but also have a positive impact on industries, society, and the planet.
The firm is committed to investing in entrepreneurs who leverage deep technological expertise to build businesses driven by intellectual property. Through its investments, Aeravti Ventures is actively contributing to advancing technology and innovation, fostering growth and differentiation in the market.
The firm focuses on backing changemakers and pioneering deep, climate, and agri-tech solutions. It plays a crucial role in shaping industries and positively impacting society and the planet.
By backing early-stage businesses with a strong focus on innovation and sustainability, Aeravti Ventures is helping to create a brighter future for future generations.
With a team of experienced professionals passionate about supporting innovative businesses’ growth, the firm is committed to driving positive change and promoting long-term success for its portfolio companies.
pi Ventures – Top VC Fund Supporting India’s Young AI Startups
pi Ventures is a venture capital firm that focuses on helping entrepreneurs build innovative businesses in the DeepTech space. Their team, consisting of former entrepreneurs, understands the challenges startups face and provides funding, access to talent, and an ecosystem that encourages success.
They pride themselves on supporting disruptive companies with bold and innovative ideas that have the potential to change the world. One of their critical criteria for selecting startups is their ability to tackle significant and fundamental challenges on a global scale.
They encourage entrepreneurs to think beyond local markets and leverage their international network to build global companies. pi Ventures is particularly interested in supporting category leaders who are utilizing AI to differentiate themselves.
With the world shifting towards digital adoption and remote work, the firm believes that AI is at the second inflection point of its evolution. They are keen on identifying and investing in startups capitalizing on this trend, focusing on accelerating and emerging AI use cases across various industries and regions.
5. Together
Founded By
Girish Mathrubootham
Founded In
2021
Headquartered At
Bangalore, India
Website
www.together.fund
Together – Top VC Fund Supporting India’s Young AI Startups
The venture capital firm Together follows a founder-first approach and operates similarly to a tech startup. Its investment focus encompasses various sectors such as software-as-a-service (SaaS), enterprise software, developer tools, open-source software, cloud-native infrastructure, and API-first businesses.
The firm primarily invests in early-stage companies, spanning from seed to pre-Series A or Series A rounds, to guide and support founders during the crucial zero-to-one phase of their entrepreneurial journey.
The selection of sectors reflects the diverse expertise and backgrounds of its founding partners, who bring a wealth of industry experience.
These partners include Girish Mathrubootham, who co-founded Freshworks; Manav Garg, founder of Eka Software; Shubham Gupta, who formerly led SaaS deals at venture capital firm Matrix Partners India; and Avinash Raghava, founding volunteer at SaaSBOOMi and co-founder of iSPIRT.
6. Hyderabad Angels (HA)
Founded By
NA
Founded In
2012
Headquartered At
Hyderabad, India
Website
www.hyderabadangels.in
Hyderabad Angels (HA) – Top VC Fund Supporting India’s Young AI Startups
Hyderabad Angels (HA) has established itself as a prominent and reliable platform in India’s startup ecosystem. Since its inception in 2012, the organization has been dedicated to supporting and nurturing aspiring entrepreneurs by bridging the gap between them and established angel investors.
Over the years, HA has transformed into a dynamic force that invests in promising startups globally to create tangible and intangible value.
Even though HA is headquartered in Hyderabad, it operates across a wider geographical area, sourcing and investing in opportunities from different regions of India and overseas destinations such as the USA, UK, Singapore, and UAE.
Its global outlook enables it to tap into diverse markets and opportunities, fostering a rich innovation and growth ecosystem.
HA’s investor community comprises leading venture capitalists, seasoned entrepreneurs, and business leaders who bring their combined financial and business acumen to support the growth of Indian and global startups.
The organization firmly believes in building a symbiotic partnership between investors and entrepreneurs, where support for investee organizations becomes a cornerstone of their services.
The investors associated with HA are committed to providing financial assistance and offering guidance, mentorship, and networking opportunities to the startups in which they invest.
The Graph Shows the Number of AI Startups in India from May 2021 to May 2023
7. Arkam Ventures
Founded By
Rahul Chandra and Brij Bhasin
Founded In
2020
Headquartered At
Bangalore, India
Website
www.arkamvc.com
Arkam Ventures – Top VC Fund Supporting India’s Young AI Startups
Arkam Ventures is a venture capital firm committed to driving innovation in India by partnering with visionary founders who are passionate about creating a better future.
The company focuses on long-term investment strategies, often spanning multiple decades, to identify market trends, inflection points, and disruptive solutions that can potentially create large, scalable, and profitable market leaders.
The firm is driven by two central investment themes: massive market drivers, innovation-proof points, and clear opportunities for digital disruptors to reshape existing industries or create new ones.
One of these investment themes is Middle India Digitization, one of today’s most considerable global investment opportunities. This theme encompasses a significant shift towards digital transactions across essential categories that were non-existent just five years ago.
In addition to this, Arkam Ventures is also keen on supporting SaaS (Software as a Service) companies from India to the world. These companies leverage world-class product design, cost-effectiveness, and savvy go-to-market approaches to create innovative software solutions that can compete globally.
Grayscale Ventures – Top VC Fund Supporting India’s Young AI Startups
GRAYSCALE VENTURES is a prominent player in India’s venture capital landscape, specializing in providing Pre-Seed funding to startups with a dedicated focus on Developer Infrastructure.
The firm’s investment thesis revolves around Core and Vertical Infrastructure, DevTools, and AI infrastructure companies based in India, offering cheque sizes ranging from $300k to $1M.
A consortium of global tech founders and operators supports GRAYSCALE VENTURES. It operates as a collaborative force, actively leading rounds and co-building products with its portfolio companies.
The firm is headquartered in Bangalore, India. It is the country’s sole Developer Infrastructure-focused VC entity, managing $40M in assets under management (AUM). It primarily targets the founding stage (Pre-Seed/Seed) startups.
What sets GRAYSCALE VENTURES apart is its unwavering commitment to nurturing and growing the next generation of infrastructure startups in India. The firm’s mission is to provide the necessary resources and support to early-stage startups in India’s tech ecosystem to help them succeed in the long run.
GRAYSCALE VENTURES boasts a track record of successful investments in notable Dev Infra/SaaS startups from India, including Hasura, 100ms, and TestSigma.
Its robust financial backing is derived from global investors, including founders and operators from renowned companies such as Slack, Zendesk, Hasura, Freshworks, and Github, among its supporters.
9. CapFort Ventures
Founded By
Abhimanyu Bisht and Kavit Sutariya
Founded In
2023
Headquartered At
Gurgaon, India
Website
www.capfort.vc
CapFort Ventures – Top VC Fund Supporting India’s Young AI Startups
CapFort is a company that supports innovative and daring entrepreneurs who want to challenge the ordinary. The company believes that the most exciting and impactful ideas come from passionate and driven visionaries with a bold outlook for the future.
CapFort collaborates with these dynamic entrepreneurs, serving as a strategic partner in their journey toward building successful businesses. Beyond providing financial support, the company offers expertise and guidance to entrepreneurs, aiding them in navigating the challenges of entrepreneurship and realizing their visions.
As an integral part of India’s vibrant startup ecosystem, CapFort is dedicated to fueling its growth and success. The company draws inspiration from the trailblazing entrepreneurs it collaborates with, who constantly challenge conventions and strive to create positive change in the world.
CapFort remains committed to supporting these entrepreneurs at every stage of their journey, assisting them in achieving their goals and unlocking their full potential.
CapFort is led by Abhimanyu Bisht, former CEO of Venture Catalysts, who brings extensive experience in angel fund investment evaluation. The company is further strengthened by the expertise of Kavit Sutariya, founder of Hiraco Ventures.
With a portfolio spanning over 72 investments across various sectors and startup stages, Kavit Sutariya’s insights and leadership enhance CapFort’s ability to identify and nurture promising ventures.
10. Speciale Invest
Founded By
Vishesh Rajaram and Arjun Rao
Founded In
2016
Headquartered At
Chennai, India
Website
www.specialeinvest.com
Speciale Invest – Top VC Fund Supporting India’s Young AI Startups
Speciale Invest is a fund that invests in deep tech solutions and engineering innovation. They take a people-first approach and value visionaries who can articulate the strength and potential of their ideas effectively.
They invest in solutions that haven’t existed in the past and seek out exponential innovations that simplify and enhance the world.
Their investment strategy prioritizes founders with deep domain insights and a solid motivation to succeed. They typically invest between $100 to $500K in multi-disciplinary technologies such as Enterprise Software & SaaS and Frontier Tech.
Beyond capital, they offer their portfolio companies access to early customers, assistance with hiring early team members, support in raising follow-on capital, industry updates, and active partnership in the companies’ progress.
11. Equirus
Founded By
Ajit Deshmukh
Founded In
2007
Headquartered At
Mumbai, India
Website
www.equirus.com
Equirus – Top VC Fund Supporting India’s Young AI Startups
Equirus, pronounced as ek-wi-rus, derives its name from the idea that “Equities are us”, reflecting its deep commitment to financial markets. The firm’s philosophy, encapsulated by the Banyan Tree Philosophy, symbolizes its aspiration to foster an entrepreneurial organization where individual contributions flourish independently yet seamlessly integrate with the overarching mission.
Much like the aerial prop roots of a banyan tree, Equirus aims to thrive and endure over generations while providing strength and shelter to its ecosystem.
Throughout its journey, Equirus has gained an exceptional reputation and market standing across various domains, distinguishing itself for its proficiency in structuring and executing transactions tailored to meet clients’ needs.
Rooted in a set of core values, including client-centricity, integrity, trust, innovation, transparency, team spirit, and excellence in execution, Equirus remains steadfast in its commitment to achieving its vision.
Equirus’ vision is to become the most preferred Investment Bank by prioritizing focus, innovation, and trust. With a mission to deliver exceptional value and service to its clients, Equirus strives to uphold its reputation as a trusted partner in navigating the complexities of the financial landscape.
12. GOOD CAPITAL
Founded By
Arjun and Rohan Malhotra
Founded In
2019
Headquartered At
Delhi, India
Website
www.goodcapital.vc
Good Capital – Top VC Fund Supporting India’s Young AI Startups
GOOD CAPITAL is a venture capital firm, specializing in intermediary-led business models. They focus on using intermediaries to provide a high-touch, human interface to consumers, enhancing the overall consumer experience.
GOOD CAPITAL invests in startups from the concept stage to Series A, particularly interested in founders with practical knowledge and insights from their respective industries.
Although GOOD CAPITAL does not limit itself to any specific sector, the company prefers to invest in technology products that address India-centric problems. This approach reflects the firm’s dedication to supporting innovative solutions that can significantly impact the Indian market.
GOOD CAPITAL aims to promote visionary entrepreneurs and develop disruptive solutions that address the ever-changing needs of the Indian consumer landscape. By maintaining a diverse portfolio and being flexible in their investment strategy, the company strives to achieve its objectives.
India’s startup ecosystem is experiencing a remarkable surge, particularly in the field of artificial intelligence (AI), with numerous ventures poised to transform industries through innovation. The success of these startups hinges not only on groundbreaking ideas and talented teams but also on significant financial backing from venture capital (VC) firms.
As India continues to emerge as a hub for technological innovation, the collaborative efforts of these VC firms play a pivotal role in nurturing and propelling the next generation of AI startups toward success, driving positive change, and fostering sustainable growth in the country’s tech ecosystem.
FAQs
How many Unicorn startups are there in India?
It is stated that India is home to 112 Unicorns as of the start of 2024 as per the data shared by StartupTalky.
Which company invested in Zepto?
Zepto has raised its funding from multiple firms throughout its journey. Firms like StepStone Group, Goodwater Capital, Nexus Venture Partners, Glade Brook Capital, Lachy Groom, etc. are known to invest in Zepto.
Which startup sector is growing fast in India?
India has a wide range of opportunities for multiple startup sectors to rise. Some of the most common fastest-growing startup sectors in India are FinTech, EdTech, E-commerce, and artificial intelligence.
Does the Indian government provide funds for startups?
Yes, the Indian government provides multiple schemes and subsidiaries in order to provide financial aid to startups.
We are living in an era where fintech is taking over the world. Technology has always given us a revolutionary form in every sector, now it is the turn for fintech. India has become a hub for startups. More and more people are showing their interest in being an entrepreneur. Fintech startups are showing immense growth in the country and as of now, India has over 2,100 Fintech companies. As per reports, by 2025 the fintech market in India is expected to reach $150-160 billion.
Now, any kind of business needs funds to function, without funds, the survival of a business is not possible. The fintech industry is booming with new business ideas and opportunities alike. Now Fintech startups are experiencing growth and one of the prime reasons is the investors. They are providing these startups with the required funds that their business needs. In this article, we will talk about the different investors in India that invest in fintech startups. So, without any further ado, let’s get started.
“FinTech is not only an enabler but the driving engine” -Pierre Gramegna
How Fintech Founders are Planning to Dominate the Indian Bond Market?
Elevation Capital which is formerly known as SAIF Partners is a venture capital firm known for investing in some of the most popular startups and is one of the biggest investors in India. The company was founded in the year 2002 by Ravi Adusumalli and since then it has never looked back and provided support to some of the biggest fintech startups in India. Some of the popular Indian fintech startups that have received funding from this venture capital firm are PayTm, FamPay, Uni, Jodo Anthem, Aye Finance, Acko, and more.
This Mumbai-based investment firm, founded in 2010 has been showing its grasp by investing in some of the seed-stage and early-seed-stage startups from all sectors of business. The venture capital firm has participated in more than 175 funding deals. Some of the Indian fintech companies it has invested in areInstamojo, Turtlemint, Slice, Zopper, Kaleidofin, Unicoin, smallcase, and more. Blume Ventures is one of the most popular venture capital firms in India that has generously invested in some of the most popular fintechs in India.
Better Capital is founded by Vaibhav Domkundwar and the firm is focused on building and investing in promising businesses. This India-based, venture capital firm has been showing its interest in fintech startups from the very beginning. Better Capital’s investment portfolio includes more than 200 companies among which 40 are related to fintech. The venture capital firm has invested in some of the popular fintech startups like Rupeek, Open, Slice, M2P, Jupiter, Rupify and others.
Kalaari Capital is a popular Indian Venture Capital firm that is founded by a woman, Vani Kola. The headquarters of the Kalaari Capital is situated in Bengaluru. The investment firm founded in 2006 mainly looks for promising and early seed-stage startups from multiple sectors to invest in. Kalaari Capital has invested in the likes of Threedots, Upstox, Toffee Insurance, AffordPlan, WeRize and other fintech startups.
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The venture capital firm mainly focuses on early-stage businesses and invests in them. The company focuses on multiple sectors including Fintech, Edtech, b2b sectors dealing with fintech, Health-tech, SaaS, consumer brands and others. The headquarters of the company is situated in Mumbai. The company has invested in more than 70 deals and among them, 9 are related to fintech startups. Some of the popular fintech startups that the venture has invested in areLendingkart, LoanTap, Upwards, Propelld, and more.
Prime Venture Partners
Founder – Amit Somani, Sanjay Swamy and Shripati Acharya
Prime Venture Partners – Fintech Investors in India
Prime Venture Partners was founded in the year 2011 and since then it has funded many fintech startups. The company was founded by Amit Somani, Sanjay Swamy and Shripati Acharya and the headquarters is situated in Bengaluru. The company has also invested in the sectors of Edtech, SaaS, and health care. Some of the major fintech startups that Prime Venture Partners have invested inareNiyo, AffordPlan, KredX, Knight FinTech, and more.
Pravega Ventures
Founder – Mukul Singhal, Rohit Jain and Vinay Menon
Another prominent fintech investor in India on the list is Pravega Ventures, founded by Mukul Singhal, Rohit Jain and Vinay Menon. The headquarters of the company is situated in Delhi. Pravega Ventures has contributed to more than 26 funding deals till now. The venture capital firm focuses on tech-related startups which include fintech as well. It has invested in fintech startups like ePayLater, Flexmoney, Mintoak, MyShubhLife, and more.
Titan Capital
Founder – Kunal Bahl and Rohit Bansal Founded – 2015 Investment Portfolio – LogiPe, Jupiter, Credgencies, Razorpay, Tinkerr, Astu Credit
Titan Capital – Fintech Investors in India
Titan Capital is a venture capital firm whose headquarters is situated in Gurugram. The most interesting thing is that the firm is founded by Kunal Bahl and Rohit Bansal who are the founders of Snapdeal. The firm focuses on funding seed-stage and pre-seed-stage startups. It was founded in the year 2015 and since then Titan Capital has participated in many funding deals related to different sectors of startups. Titan Capital has invested in fintech startups like LogiPe, Jupiter, Credgencies, Razorpay, Tinkerr, Astu Credit, and more.
For any kind of business, investment is necessary. Investors willingly provide businesses that they deem to be potential with the needed funds. Fintech startups are growing in numbers in India, and it seems like it’s just the start of the real game. Naturally, investors are also looking to invest in fintech startups as financial services have become an important need and the market is growing quite fast. With time, many other venture capital firms will also start investing generously in fintech startups.
FAQs
What is Fintech?
Financial technology is abbreviated to FinTech and it comprises companies that use technology to offer financial services.
How many fintech startups are there in India?
There are more than 2100 fintech startups in India as of 2022.
Say you have got a brilliant idea for a startup that can change the way we see things, that solves a problem that everyone needs a solution or boosts the economy. But you do not have enough money to put your vision into being. Sure, there are a lot of ways in which a startup can get funding to establish the foundation of the business. But given the fact that three out of four startups fail, who would like to take the risk to invest in a newfound business?
Capital and startup go together, that is where a VC (venture capital) firm comes into the picture. But if you are not very familiar with the term. Continue reading with us to get an idea of what a venture capital firm is.
People involved in a Venture Capital firm include entrepreneurs, investors, investment bankers, and venture capitalists. A venture capital firm will invest in your business with the aim of a good ROI (Return on Investment) and have a stake which is usually less than 50% in the ownership of your startup. The other main goals include exiting the investment. Either by selling off their stake or through an IPO (Initial Public Offering) at a profit and giving back to its investors.
A venture capitalist firm is run by venture capitalists who raise venture capitalist funds by taking money from other people and investing it into promising young companies. These firms could clearly outline which industry they want to invest in. Who are the people they are looking for? What kind of funding do they want to do? At what stage of your business? And how much money are they willing to pool in?
Stages of Funding Rounds
Pre-seed funding round: Investments in startups are known as private equity or venture capital. Despite their high risk, these investments also have a greater chance of exponential growth.
Seed funding: This is the earliest stage in the process of raising capital for your startup.
The A-series: Funding is for when the company has established product and market fit, started to make some serious buzz and its customer base is growing fast.
The B Series: This represents a period when the firm generates significant revenue in particular markets and looks to expand its reach.
The C series: Eventually, the company will expand and operate globally. If it is ready for an IPO, it may be purchased by another company or continue operating as a private company.
Other Ways of Fundings for a Startup
Besides Seed Funding, there are other ways too, by which a startup can collect funds, some of the common ways are:
Bootstrapping is a method of raising pre-seed funds. When a startup bootstraps itself, it means that it launches without the help of external investors. Thus, the cash flow produced by the business itself fuels internal growth. A bootstrapped business may raise capital through customer funding, personal debt, or personal savings in its initial stages, which works as an effective model for some new companies. However, bootstrappers may face cash flow issues due to high levels of personal stress.
Governments or industry-specific organizations provide grants to these startups for entrepreneurs who do not wish to give up equity, grants are another alternative for venture capital.
Family, friends, and relatives are usually the first ones to support and invest in your startup. When you haven’t achieved much success or haven’t done anything, that can prove a tangible return on investment. In this scenario, your stakeholders may have limited or no experience with venture capital. Known as the three F’s (Friends, Family, and Fools), this is considered the fourth type of pre-seed funding.
Pre-seed accelerator programs are the fifth type. Through these programs, founders learn lean startup practices, develop a scalable and repeatable business plan, and show some product-market fit to attract early customers to their product.
Lastly, crowdfunding can be used for pre-seed funding, and here financing is approached differently. A crowdfunding campaign is a way of raising money from many individuals in small amounts, often online. The types of crowdfunding include equity-based, reward-based, debt-based, and donation-based.
Check out the Top 10 active VC Firms in India in 2022.
Tiger Global Management
Founder: Chase Coleman III
Established: 2001
Investment stage: Series A to pre-IPO stages of companies
Industry: Software, Consumer, and FinTech
Portfolios: 763
Headquarters: Mumbai
Tiger Global Management based in New York has affiliate offices in Hong Kong, Beijing, Singapore, and Bangalore. It is one of the most active global tech investors and follows a long-term-based investment approach to generate superior risk-adjusted returns for its investors. They started their public equity in the year 2001 and private equity in 2003 making investments in growth-oriented private companies from early to late stages.
Last year it was listed under the list of the world’s biggest unicorns with most of the co-investors in the company being Accel, Coatue, and DST Global. Some of their notable investments include companies like Shein, Meta (formerly known as Facebook), Coinbase, AirBnB, Uber, SoftBank, and more. Their latest fund size as of March 2022 is $12.7 billion.
Omidyar Network India
Founder: Pierre Omidyar
Established: 2004
Investment stage: Early-stage enterprises
Industry: Digital Society, Education, Emerging Tech, Financial Inclusion, Cities & Innovation, and Property Inclusivity
Portfolios: 100+
Headquarters: Mumbai
Omidyar Network India
Omidyar Network India is a part of the Omidyar Group, whose organizations and initiatives are supported by philanthropists Pam and Pierre Omidyar, founder of eBay. This period represents a period when the firm generates significant revenue in particular markets and looks to expand its accompanies to fast-track its growth. As well as giving access to the Center of Excellence Board for strategic and operational inputs.
They have a total of 102 active investments, raising the combined fund size to around $417 million. Few notable clients of Omidyar Network India are 1mg, Quikr, WhiteHat Jr, Zest, etc.
Accel
Founders: Jim Swartz and Arthur Patterson
Established: 1983
Investment stage: Pre-seed, seed, early, and growth-stage investments
Industry: Computing and Storage, Infrastructure, Consumer, Internet & Media, Enterprise Software & Services, Mobile Networking Systems, Retail Consumer, Security, Technology Enabled Services
Portfolio: 1840+
Headquarters: Bengaluru
Formerly known as Accel Partners, Accel has backed up some of the most successful companies like Flipkart, Dropbox, Etsy, Facebook, Spotify, Slack, Vox Media, and many more over the past thirty-five years. Accel has a global community of entrepreneurs and has been investing in private companies from their pre-seed, seed, early, and growth-stage investments.
Founded in 1983, Accel has been one of the most active venture capital firms in Silicon Valley still going strong with their core principles, completing thirty-five years in the industry last year. The company values collaboration, placing the group above everything else, and creating investors from within. Accel continues to move forward with its Silicon Valley state of mind. Their most recent investment made was $57M raised by Middesk in June 2022.
3one4 Capital
Founders: Pranav Pai and Siddharth Pai
Established: 2015
Investment stage: Early-stage venture capital fund
Industry: Fintech, consumer products, SaaS, digital media, climate tech, and digital health
Portfolios: 50+
Headquarters: Bengaluru
3one4 Capital
3one4 Capital is a venture capital firm based in Bangalore, India. Specialities include investment in startups based in early stages, seed capital and early investments. The firm works with the founding team, bringing in subject proficiency to find the best strategy for the product market for defensibility, revenue growth, and creating an impact. Focused on delivering uncompromised end-user experiences, curtailing risk, uncovering new growth opportunities, and yielding rewarding outcomes for all the stakeholders involved.
Interested in the intersection of adjacency that is large, growing, and ready for unique products and services and select market categories, the VC firms’ investments are biased towards companies exploiting technology to create, grow, or dominate large markets in India. Notable investments by 3one4 Capital include companies like Licious, Darwinbox, Jupiter, Betterplace, Open, Bugworks, Koo, Dozee, and Tracxn.
Kalaari Capital
Founder: Vani Kola
Established: 2006
Investment stage: Seed and A Series
Industry: Technology-oriented companies
Portfolios: 110+
Headquarters: Bengaluru
Kalaari Capital
Started in the year 2006 by Vani Kola and headquartered in Bangalore, Kalaari Capital is an early-stage technology-focused venture capital firm based out of Bengaluru, India. Kalaari continues to empower and work with visionary entrepreneurs that build unique solutions that reshape the way Indians live, work, consume and transact. Kalaari partners early with founders and works with them to navigate the inevitable challenges of fostering ideas into successful businesses.
Kalaari believes in being authentic, perceptive, and responsive. Accelerate and enable your firm to give importance to your potential more than your pedigree.
Blume Ventures
Founder: Karthik and Sanjay
Established: 2010
Investment stage: Seed-stage and early-stage companies
Industry: Business products, business services, consumer products, consumer services, financial services, healthcare, information technology, manufacturing, cybersecurity, big data, e-commerce, blockchain, cannabis, business-to-business payments, mobile commerce, Esports, TMT, gaming, and technology-based
Portfolios: 100+
Headquarters: Mumbai
Blume Ventures
Bridging the gap in the Indian market between local angel networks and larger global venture capital firms, Blume Ventures is a key player in India’s startup ecosystem and has backed up and built many transformational networks ever since. Backing up ventures that trigger a fundamental change in consumer behaviour, impacting larger markets, and solving problems that are difficult and uniquely Indian in nature.
The testimonials clearly treat companies as customers, not just as portfolios. Offering more than just financial help, being friendly, being open-minded, and collaborative in their efforts. Blume Ventures has managed over $280M+ in Capital, backed up more than 150 Startups, and made 24 Exits. Ventures like Purple.com, HealthifyMe, Dunzo, Turtlemint, Locus, and more have been backed by Blume ventures.
Helion Ventures
Founders: Rahul Chandra, Ashish Gupta, Kanwaljit Singh, and Sanjeev Aggarwal
Helion Ventures helps organizations build based on strategies and in making strategic choices. It is a $605 Million India-focused VC firm. That supports early to mid-stage venture funds investing in technology-powered and consumer service businesses in sectors like Outsourcing, Internet, Mobile, Technology Products, Retail Services, Healthcare, Education, and Financial Services. Mainly focusing on making investments based in India. Some notable investments were made in ventures like BYJU’S, Gupshup, Ola, LivSpace, Toppr, and more.
India Angel Network
Founders: Padmaja Ruparel, Raman Roy and Saurabh Srivastava
Established: 2006
Investment stage: Early-Stage Venture, Seed
Portfolios: 160+
Headquarters: New Delhi
India Angel Network
The members of the India Angel Network lead from the front, having strong operational experience as CEOs or a background in creating new and successful ventures. The advantages of working with the firm are they are willing to invest money and time, have the ability to leverage a vast network, and give quick feedback on investment decisions.
Keen to invest in startups based in their early stages, the India Angel network provides quality mentoring, and vast networks give input on strategies and move ahead with its execution. Working with sectors as diverse as Agriculture, E-Commerce, Education, Financial Services Gaming Healthcare Hospitality, information, and more. A few notable investments of India Angel Network are WOW momo, Zippr, Wiwigo, Pikkol, etc.
Mumbai Angel Network
Founder: Nandini Mansinghka
Established: 2006
Investment stage: Early-stage investments
Industry: Technology, consumer, life sciences, defence technology, space technology, electric vehicles
Portfolios: 200+
Headquarters: Mumbai
Mumbai Angel Network
The Mumbai Angel Network invests in a wide variety of domains such as—technology, consumer, life sciences, defence technology, space technology, electric vehicles, and hemp seeds. They have over seven hundred investors in more than sixty cities around the world and are focused on new venture investing. The premier private investment platform has invested more than 150 crores with a base of more than 700 investors.
The portfolio of Mumbai Angel Network includes startups like Snackible, LegalKart, Barneys, Brainwired, etc.
Founder: Nikhil Vora (Ex-Managing Director of IDFC Securities), Swati Nangalia Mehra
Established: 2014
Investment stage: Seed, A Series, B series, and more
Industry: Transportation, Logistics, Supply Chain, and Storage
Portfolios: 60+
Headquartered: Mumbai
Sixth Sense Ventures
Known as India’s first domestic consumer-centric venture fund. The Sixth Sense Ventures combines foreseeing a trend together with deep insights and delivers a clear vision. The sixth sense has a focus on Indian start-ups and leads with an immensely powerful team. Having cumulative experience in the wider consumer domain, their core team has a strong Center of Excellence Board.
The company creates value for both investors and invested companies. The firm has strong consumer-centric research and investment analysis in its ecosystem, making it easy for companies to fast-track their growth. As well as giving access to the Center of Excellence Board for strategic and operational inputs. The portfolio of Sixth Sense Ventures includes startups like Ethos, Bira 91, AVG Logistics, MyHealthcare, etc.
Conclusion
The venture capital firms in India are growing at a fast pace and supporting budding entrepreneurs with not only money but also guiding them by mentoring them and helping them grow in various aspects of different industries. Helping entrepreneurs and their startups achieve success against all odds.
India has witnessed a significant increase in the emergence of startups in the last few years. India is now the world’s second-largest startup hub, with over 94 unicorns in total. Indian entrepreneurs have evolved into powerful drivers of the country’s economic progress. This is undoubtedly the best time to start a successful company in India.
With the Government encouraging people to form their startups, more and more people are indulging themselves in this journey. Currently, we have over 65000 startups in the country. The best part is every sector be it fintech, digital marketing or any other, is flourishing in the country.
Graph showing the Top 5 most valued Indian Startups as of the end of 2021
You got a Startup idea to build a product that could change lives. You have the BusinessModel and Product Development roadmap laid out. You might even have a small team to get started in your startup. And then comes the real problem that every Entrepreneur faces – funds to hatch the plan.
We all know that timing plays a major role in the success of any startup. It’s not a simple task to transform the ideas into a profitable business. Founders might not always have the funds to launch the product at the right time in the market at the beginning. Since growth is the main goal in the initial stages, startup owners must understand how to raise the “seed” capital.
What are Seed Funds?
Startups raise seed funds essentially for operational costs like hiring the right people, purchasing tools, leasing offices and more. This crucial step forms the solid basis for launching a thriving business at the right time. When you start a business, the most important thing that is needed is funding. Seed funding means the funds by investors provided to your business in the initial stage. The investors pour their funds in return for an equity stake at the initial stage of business. It is at the early stage that the investment by the investors is done, which helps the business to grow and make its capital. Seed funding should not be confused with a loan. Investors get equity in the company for their investment. Now that we know what seed funds are and why they are crucial, let’s dive deeper into the different ways to raise seed capital for your startup.
Crowdfunding is becoming increasingly popular in recent years. Many startups have successfully raised seed money through crowdfunding platforms like Kickstarter, Indiegogo and Wefunder. The process involves creating a campaign to convince and persuade thousands of people to invest and buy your product before its developed. This method is a great strategy for founders who do not want to give up equity and dilute the company at the seed rounds. The idea is to build the product from the money made from pre-sales and ship it when ready. Startup founders also utilize crowdfunding websites to understand the market and assess the demand for their products. The idea is to build the product from the money made from pre-sales and ship it when ready.
Friends and Family are mostly the first places every entrepreneur reaches out to for investment when getting started. Some founders offer equity in the company but many consider this investment as a loan. This method provides a little breathing room in terms of loan repayment.
Accelerators
Acceleratorstypically exist for startups that need assistance with launching and growing the company. Accelerators like Y Combinator runs programs to choose startups for investing. The selected startups get a pre-decided amount in return for a specific percentage of equity. They also support startups with Mentorship and Networking events where the founder gets exposure.
Incubators
Incubatorsare specifically created for startups that are at an early stage. They facilitate the development of ideas and the validation of market fit. The investments are usually small as most founders get this funding to nurture the idea and introduce innovations. Incubators also offer Workspace and Mentorship Support and Networking Opportunities for founders.
Many established corporations consider startups as a major source of fresh talents and innovative ideas. Megacorporations are always on the lookout for new ways to invest in emerging technological innovations. Again, this type of financial help gives the startup much-needed exposure and is frequently a precursor to a potential acquisition.
Bootstrapping
Let’s not forget that not every startup needs to raise money at the seed stage. Bootstrapping is the process of funding the startup with your savings and reinvesting the profits from the business. Many startup founders use their own money to get their businesses off the ground to eliminate giving away equity at the initial stages. Bootstrapping, on the other hand, might put entrepreneurs under further financial strain.
Venture Capital Funds
Venture capital firms offer seed funding for startups with high growth potential. Venture capitalists provide both professional experience and money to entrepreneurs. This type of investment calls for the exchange of a company’s equity for financial assistance. VCs review a lot of projects but only invest in a small percentage of them, so you’ll have to stick out from the pack.
Angel Investments
Angel investors are affluent people who invest their own money as seed capital in businesses in return for equity of the company’s ownership. This process is relatively quicker than a VC investment. Many angels are known to use convertible debt as it has the advantage of deferring the company’s value until the next funding round. Angel investors also get discounts for investing early in the startups.
Debt Funding
Debt funding is often provided by the bank, an investor or any financial institution to the startup founder. Here, the founder is borrowing the money for a fixed rate of interest instead of giving away any equity in the company. The capital must be repaid with the interest at the agreed timeline. It’s important to note that the only advantage for the investor here is the interest amount.
Government Grants and Schemes
The Indian government has stepped up to support young entrepreneurs who need help with growing their startups. The government has taken initiatives likeThe Startup India Seed Fund Scheme (SISFS) which intends to support startups with the conceptualizing of new ideas, developing prototypes, determining the demand in the market and monetization.
Conclusion
There is no doubt that raising the seed funding is difficult. Gaining the right understanding of the options available for you is the key and we hope that our information has helped you. You must also know and understand how the different kinds of investors operate, how they make financial decisions to help your startup and how their seed fund can help you grow. It’s also worth noting that seed financing isn’t just for the early stages but it’s also for the years ahead. Also, keep in mind that timely capital is critical for companies to stay up in a challenging market like India. A startup that sets growth initiatives should be able to use the seed capital to raise further investments.
FAQs
What is Seed Funding?
Seed funding means the funds by investors provided to your business in the initial stage.
What are some of the effective ways of raising seed funds?
Some common and effective ways of raising seed funds are Crowdfunding, Friends and Families, Accelerators, Incubators, Bootstrapping, etc.
How many Startups are there in our Country?
There are currently over 65900 startups in the country. But the number is expected to rise shortly.
What is The Startup India Seed Fund Scheme?
The government has taken initiatives like The Startup India Seed Fund Scheme (SISFS) which intends to support startups with the conceptualizing of new ideas, developing prototypes, determining the demand in the market and monetization.
Anga Mahatara
