Mumbai-based Artha Venture Fund has marked the first close of its $29 Mn (INR 200 Cr) seed fund, Artha Venture Fund I, at $6 Mn. A Category-I fund, Artha India Ventures got the approval from the Securities and Exchange Board of India (Sebi) in March this year.
The first close saw participation from listed companies, domestic family offices, and HNIs.
This is the maiden fund of Artha Group, which is co-sponsored by Singularity Holdings and Artha India Ventures, the family offices of stock market veterans, Madhusudan Kela, Ashok Kumar Damani, and Ramesh M Damani respectively.
The fund has a greenshoe option of $15.7 Mn (INR 100 Cr). It will be a close-ended fund for a period of seven years with the option to be extended by up to two years.
The Artha Venture Fund-I aims to make small-ticket size investments in around 40-45 startups. The funds will be disbursed across three stages with ticket sizes ranging between $157K (INR 1 Cr) and $1.1 Mn (INR 7 Cr). It will give a total commitment to each company over three rounds, ranging from $1.4 Mn (INR 10 Cr) to $2.1 Mn (INR 15 Cr), with 50-60% of the fund earmarked for follow-on rounds.
The Artha Venture fund team is already in the process of completing three to four investments by the quarter ending September 2018 and intends to make eight to 10 new investments each year.
Artha Venture Fund-invested startups will gain access to a global ecosystem of founders, advisors, professionals, and academicians who are associated with the fund, the company said in a media statement.
The Artha Venture Fund Team
Artha Venture Fund is founded by seed investor Anirudh A Damani, who has been investing in startups through his family office. He has participated in over 100 rounds of funding and invested in startups such as OYO Rooms, Tala, NowFloats, Exotel, Coutloot, Purplle, BabyChakra, Fynd, and Mobilewalla, which have delivered stellar results for their portfolio.
Anirudh is joined by Vinod Keni, ex-CFO and partner of Aavishkaar Venture Fund and the IAN Fund. He is a leading investor whose bets include Wow Momos, Dhruva, Mobilewalla, Consure Medical, and Stayzilla.
In addition, there are two associates working for the fund, with plans to increase the size of the team.
The advisory board comprises Madhusudan Kela, ex-chief strategy officer, Reliance Capital; Dr Alfred E Osborne, interim dean at the University of California Los Angeles (UCLA) and director at Kaiser Aluminum and First Pacific Advisors; and Rajesh N Gupta, managing partner, SNG & Partners.
The Next Steps
As Anirudh shared with Inc42 in an earlier interaction, with Artha Venture Fund, he is looking for startups with innovative and disruptive business models that have a high growth potential and a team that has the ability and experience to execute their plans. “We have daily meetings at our office with startups who apply to us. On a daily basis, we receive 25-30 applications.”
Also, the portfolio companies get access to Artha Group’s widespread network. Be it marketing, leadership, training, finance or fund management, a large group of venture investors, founders, and professors is accessible to the startups to take assistance from in solving their problems.
Artha Venture Fund further plans to participate in LenDenClub’s Series A fundraise. It led the Pre-Series A raise for LenDenClub in September 2017. Since then, the investment has seen 4x growth in the number of loans disbursed and it has expanded to Bengaluru, Pune, and Ahmedabad. In June alone, it disbursed more than 285 loans funded through 6,187 investment transactions by 571 lenders.
As Anirudh A Damani said, “LenDenClub is going to be a really good investment for us as I firmly believe that LenDen is at the right place, at the right time; I am certain that it will turn out to be a big winner for Artha Venture Fund.”
According to Inc42 DataLab’s H1 2018 tech startup funding report, there has been a sharp dip in both the number of funding deals as well as funding amount, particularly at the Seed and bridge stage, in the first half of the year. The number of seed funding deals saw a 30% decrease compared to 2017. With sectors such as artificial intelligence, big data, edtech, entertainment, hardware, and adtech expected to pick up pace in the coming months, Artha Venture Fund may find some interesting startups to lay its bets on.