Optimistic About Finding Category-Defining Companies Kae Capital is continuously searching for category-defining startups to invest in and is hopeful about discovering them during this time.
By Sujata Sangwan •
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The venture capital firm Kae Capital intends to make investments across sectors while keeping an eye out for disruptive and fundamentally sound companies.
"Deep focus has been and remains our main priority. As a Partner at Kae Capital, Gaurav Chaturvedi remarked, "We will keep looking for deep products that are 'need to have' for the clients rather than 'nice to have'.
Kae Capital is continuously searching for category-defining startups to invest in and is hopeful about discovering them during this time.
To save money and concentrate on the fundamentals, Chaturvedi continued, "we are advising our companies to obtain great product-market fit (PMF) in their core businesses with solid unit economics. We advise them to start aggressively concentrating on their core operations and to start making cost reductions in non-core sectors where there is a weak PMF (product market fit). We occasionally suggest that they also look for bridge rounds."
According to Chaturvedi, this time will see the emergence of several category-defining businesses. "We are currently facing a challenging financial environment, and it will likely stay challenging for some time. Since 2021, the rate of growth-stage investments has slowed down, and solid fundamentals are now the main focus. Obtaining funding from Series A onwards has been difficult and will continue to be difficult for a while."
The firm observes numerous bridge rounds. "They have already started and will keep happening," stated Chaturvedi. "While unit economics have frequently been the main emphasis in startups, profitability has increasingly taken centre stage. The current investment view has shifted. Because capital is scarce, investors want to put an early emphasis on profitability, which is why there is a renewed emphasis on these basics."
Founded in 2012, and based out of Mumbai and Bengaluru, Kae is a sector-agnostic fund that invests in pre-seed to pre-Series A stages. Its portfolio has a mix of B2B and B2C startups. Some of the names are Tata 1MG (healthtech), Zetwerk (manufacturing tech), Porter (logistics tech), 1K (B2B retail tech), and Wysa (healthtech). Kae is the first institutional investor in a majority of its portfolio companies.
Stats:
Total Startups Invested in: 81 (since inception)
Total Exits: 14 (since inception)
Ticket Size: USD 1 million - USD 3 million
Fund Size: USD 171 million across 3 funds
