Artha Venture Fund Raises INR 220 Cr To Close Its Debut Fund

Artha Venture Fund will now look to invest in early-stage startups across B2B, B2C, and D2C segments, according to a senior company executive

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Early-stage micro-venture capital (VC) fund Artha Venture Fund (AVF) on Friday announced the final close of its debut fund at INR 220 crore. The fund invests in B2B, B2C/D2C sectors, and D2C enablers amongst others, and had targeted raising INR 200 crore.

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However, a surge of interest in Indian startups 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 startups across seed, pre-Series A, and series-A levels of growth.

"I am delighted with the confidence that our investors have shown in our investment strategy. Besides exceeding our targeted raise two months ahead of schedule, almost 50 per cent of our first cohort of LPs doubled down on their earlier investments. Many referred us to people in their network. I welcome each LP to our investor family. Their reinvestment in, and promotion of, our fund within their network is a clear indicator that our fund strategy and structure resonates with them at a deeper level,” said Anirudh A. Damani, managing partner, Artha Venture Fund.

The fund had targeted closing the corpus by July 2021 but over-achieved its target two months ahead of schedule.

"The real credit of closing this fund goes to our founders and my fantastic team. 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, our portfolio-wide revenues grew threefold in 12 months without raising additional capital. This frugal but explosive growth is what excites us and our investors. We will continue to scout for Seed stage deals in our preferred investment themes of D2C, D2C enablers, and B2B. Another sleeping giant that has piqued our interest in the last 12 months is the gaming sector, especially for the masses," Damani added.

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. NRIs, 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, the platform shared.

“I am humbled and grateful for the confidence placed by our investors in our investment and capital deployment strategy. The increase in commitments by our existing limited partners further validates our execution and the market opportunity. I look forward to working with our LPs, learning and leveraging their experience, expertise, and networks for the benefit of our portfolio companies. The experienced team at Artha Venture Fund understands the importance of shared efforts, vision, and purpose required to support amazing and successful enterprises. Our limited partners are vital to this mission,” commented Vinod Keni, growth partner, Artha Venture Fund.

AVF had previously announced the second close of ₹100 crores of the said fund in June 2019. It has invested more than 25 per centof the total corpus in category-winning startups such as Agnikul, LenDenClub, Kabbadi Adda, HobSpace, PiggyRide, Daalchini, and more. The fund recently reinvested in 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 and cumulatively (through associations and directly) plans to support 40 accelerator stage investments through small cheques written from this fund.