Artha India Ventures Announces Fund II, Raises ₹250Cr in First Close The firm said that AVF II's core strategy is to focus on fewer, higher-conviction investments and will selectively back startups that are post-seed, post-revenue, and raising INR 4–10 crore rounds. Capital will be reserved to provide consistent support for breakout performers.

Artha India Ventures (AIV) has announced the first close of INR 250 crores for its second early-stage microVC fund, called the Artha Venture Fund II (AVF II). The fund is targeting a total corpus of INR 500 crores with an INR 100 crore green-shoe option. According to the firm, the fund has already secured more than 50 per cent of its target commitments.

The firm announced through a press release that AVF II will invest in 36 seed-stage startups across 4 themes like premium consumption, fintech infrastructure, applied AI, and deep tech. This will be done by deploying INR 4 crore initial cheques, followed up by INR 8-16 crore follow-on investments under its proprietary 1–2–4 model.

The fund also targets 15-20 per cent ownership in its top portfolio companies and will operate on a four-year deployment cycle.

Anirudh A. Damani, Managing Partner, Artha Venture Fund, said, "AVF II is launching at a time when the startup ecosystem is undergoing a reset. In the last 8 months, barring one, India has recorded fewer than 100 seed investments per month, the lowest in nearly a decade. More tellingly, the graduation rate from Seed to Series A, historically 1 in 9 startups or around 12–13 per cent over 36 months, that rate has dropped to as low as 5-6 per cent in recent months. That tells you how capital-starved the early-stage investment ecosystem has become."

The firm has said that its capital base will remain close to 80 per cent domestic and the rest global, with 90 per cent of first-close commitments coming from Indian LPs, including family offices, and exited founders, and the remaining from international investors.

Early participants in AVF II include the Shahi Group, Narendra Karnawat (Glance Finance), DSP Family Office, and several founders from Artha's earlier investments.

"What's exciting for us as investors is that this environment filters out the noise. The tourist founders are gone; what's left are serious entrepreneurs building sustainable, capital-efficient businesses. They're focusing on raising from customers before VCs - that's precisely the kind of DNA that builds vintage funds," Damani said.

"Our 2016 and 2017 portfolios demonstrated the power of investing in resilient founders during uncertain times - 7 out of 7 exits in 2017 with a 111 per cent IRR and 16x multiple, while our 2016 portfolio delivered nearly 21x returns. We see several parallels today and believe 2025 is shaping up to be another such once-in-a-decade opportunity," he added.

The firm said that AVF II's core strategy is to focus on fewer, higher-conviction investments and will selectively back startups that are post-seed, post-revenue, and raising INR 4-10 crore rounds. Capital will be reserved to provide consistent support for breakout performers.

"Our goal is to double down on companies showing deep founder conviction, efficient capital usage, and clear revenue visibility. AVF II is not chasing volume; it's chasing velocity, i.e., concentrated capital behind exceptional founders," added Damani.