Bengaluru-based Arkam Ventures, formerly known as Unitary Helion, has announced the first close of INR 325 Cr of maiden INR 700 Cr startup fund. It will focus on early-to-growth-stage startups in Series A, Series B stages across financial services, healthcare, food, agriculture, and mobility space.
The company is looking to invest an average ticket size of INR 10-15 Cr in startups for their Series A, and INR 20-25 Cr in Series B rounds. The venture capital firm will be targetting around 15-18 companies through this fund.
Arkam Ventures says it is looking to invest in founders who combine a deep understanding of mass India or the middle-income layer of the market and those that use technology to develop low-cost solutions and efficient business models. “We will likely lean towards business models that have clear economics and retain healthy margins,” Rahul Chandra, cofounder of Arkam Ventures, added.
So far, it has also made two investments — digital lending startup Krazybee and B2B supply chain platform Jumbotail.
The venture capital firm was founded in 2017 by former Helion Ventures partner and MD Rahul Chandra and former Kalaari Capital partner Bala Srivastava. US-based impact fund Capria has led the first close of the fund, whereas Small Industries Development Bank of India (SIDBI) and several family offices based in India and the US have also participated.
Flipkart cofounder Binny Bansal, Paytm founder Vijay Shekhar Sharma and MakeMyTrip cofounder Rajesh Magow have also joined in as investors and advisors for Arkam Ventures with the latest close.
Former CEO of Microsoft India Ravi Venkatesan, Reliance Jio president Vikas Choudhry, Five9 executive VP Anand Chandrasekharan, Southeast Asian microbiome bank AMiLI’s cofounder Jeremy Lim, insurtech company Xceedance’s CEO Arun Balakrishnan, and BigBasket head HR Hari TN are acting as the advisor of Arkam Ventures’ maiden fund.
The first close of Arkam Ventures’ fund comes at a time when the funding for startups in India is drying up due to negative fallout from the Covid-19 pandemic. With public markets crashing, most investor wealth is tied up and recovery will take a few quarters at the very least.
According to a DataLabs by Inc42 report, Indian startups raised $4.1 Bn across 208 funding deals in the first quarter of 2020, ending in March. The total funding raised by Indian startups saw a massive dip between March and April 2020. The total capital inflow plunged by a whopping 55% from $1.05 Bn in March to just $474 Mn in April and $222 Mn in May.
On the contrary, if we look at the investments during the same period in 2019, the funding in March and April had witnessed a surge of 62%. The primary reason for drop in funding activity in 2020 has been the decline of VC conversations with startups which have more or less froze after the travel restrictions since mid-March. In addition to this, the negative reaction to the lockdown by the country’s stock market further depleted the investor sentiments towards the economy.
“India’s recovery from the Covid-19 crisis and a return to sustainable growth will require new ideas, policies, and mass-market solutions that positively impact the lives of millions of Indians… Arkam’s focus on startups building technology-led solutions for Middle India is timely,” Venkatesan, advisor to the Arkam Ventures added.