pi Ventures Raises $8 Mn From BII For Second Fund; Final Close Expected By March 2023

SUMMARY

The second fund will have a corpus of INR 565 Cr ($75 Mn) with a greenshoe option of up to INR 750 Cr ($100 Mn)

pi Ventures will write cheques of $1 Mn in the seed and pre-series A rounds and $1.5 Mn-$2 Mn cheques in the Series A rounds

The Indian venture fund plans to invest in 20-25 startups in the next two to three years, with follow-on investments of $8 Mn-$10 Mn in select startups

Deeptech-focused early stage Indian venture fund pi Ventures has raised $8 Mn (about INR 66 Cr) from UK-based development finance institution British International Investment (BII). The fundraise adds to pi Ventures’ second fund that marked its first close at $40 Mn (about INR 303.5 Cr) in early 2022.

The fund is also backed by Nippon India Digital Innovation AIF (NIDIA) and Accel, alongside entrepreneurs and family offices such as Binny Bansal, Varun Alagh, Samit Shetty, Rajesh Ranavat, Vikram Kailas, Anupam Mittal, Hemendra Kothari, Hitesh Oberoi, Ullas Kamath, Deep Kalra and other senior leaders from IBM, Facebook, Google and more.

Founded in 2016, pi Ventures marked the close of its first fund at $30 Mn (about INR 225 Cr) in 2018. The VC firm has an AUM (assets under management) of over INR 530 Cr and plans to mark the final close of the second fund by March 2023.

The second fund will have a corpus of INR 565 Cr ($75 Mn) with a greenshoe option of up to INR 750 Cr ($100 Mn), pi Ventures’ founding partner Manish Singhal told Inc42.

The fund invests in deeptech startups across AI, blockchain, spacetech, biotech, material science and more. Some of the sub-segments that pi Ventures will focus on include nanotech, HeSaaS, applied AI, and building infrastructure for blockchain.

It will write cheques of $1 Mn in the seed and pre-series A rounds and $1.5 Mn-$2 Mn in Series A rounds of the startups.

For follow-on investments, the fund will invest $8 Mn-$10 Mn in select deeptech startups. The second fund plans to invest in 20-25 startups in the next two to three years.

Some of pi Venture’s portfolio companies include ImmunitoAI, Agnikul, Wysa, Pixis, Ottonomy.IO, Silence Laboratories, Preimage and more.

Deeptech In Focus Amid Funding Winter

According to the latest report by NASSCOM, India is home to 3,000 deeptech startups. Further, an Inc42 report estimates that the deeptech segment received investments worth $2.79 Bn between 2014 and October 2022. Of this, over $1 Bn was raised in 2022 (to date) alone.

While the segment is not heavily funded as compared to prominent sectors like ecommerce, fintech and enterprisetech, another report by NASSCOM suggests that nearly 20% of Indian startups leverage deeptech in one form or another.

With B2B startups gaining prominence, and automation, smart devices and digitisation becoming the norm, deeptech is expected to boom. Thus, despite the onset of the funding winter, pi Ventures is bullish on the segment.

“India is at the cusp of an inflexion for deeptech startups. We anticipate large global companies to emerge from India in the deeptech space. We are totally excited to be part of this movement,” Singhal said in an interaction.

The $8 Mn commitment from BII (previously the CDC Group) is a part of its active investments within the cleantech and deeptech sectors.

Besides pi Ventures, a host of investors are betting big on deeptech startups in the country. Earlier this year, Aarin Capital’s Mohandas Pai also stated that the VC firm was bullish on deeptech (besides crypto and healthcare). The sentiment was also echoed by accelerator programmes like GSF and Entrepreneur First, and VC firms like Chiratae Ventures and Blume Ventures.