Capital A Launches INR 400 Cr Fund II, Eyes Investments In 20 Startups

Early-stage venture capital (VC) firm Capital A has launched its Fund II with a target corpus of INR 400 Cr (about $48 Mn).

The VC firm said that Fund II will invest in 17 to 20 startups and will dish out cheques in the range of $2 Mn to $3 Mn over each startup’s lifecycle. The initial investment will range from $750K to $1 Mn, the investment firm said in a statement. 

The fund will primarily focus on startups across sectors such as manufacturing, deeptech, climate tech, and fintech. 

Set to close by the end of 2025, the second fund will be backed by family offices, industry leaders, high-net-worth individuals (HNIs), and other investors. Many of the firm’s original backers from Fund I are expected to return as well.

“Our promoter-led experience gives us a distinct advantage in identifying and nurturing opportunities in sectors like green tech and fintech,” said Ankit Kedia, founder and lead investor at Capital A.

Founded in 2021 by Kedia, Capital A backs early stage startups across fintech, cleantech and other emerging sectors. It invested in notable startups such as Chargeup, Bambrew, Jiraaf, Leumas BharatSure, and Entuple via its Fund I.

The development comes at a time when the Indian startup ecosystem is witnessing a capital drought owing to the ongoing funding winter. With focus on profitability, VC and PE firms are sitting on a dry powder worth billions of dollars that they have raised in the past two years. 

However, with market conditions improving, more and more funds are lining up to raise capital from limited partners (LPs). On Thursday, another early stage VC firm z21 Ventures marked the first close of its $40 Mn Fund II at $20 Mn.

Earlier this month, Vikas Choudhary-helmed Playbook Partners, emerged out of stealth mode, and announced the first close of its maiden $250 Mn fund at $130 Mn. Venture debt firm VentureSoul Partners also marked the first close of its INR 600 Cr maiden fund at INR 146.5 Cr in September.