Prime Venture Partners Floats Fund To Back Early Stage Startups

SUMMARY

Prime Venture Partners plans to start deploying the capital from the fifth fund in the second half of 2025

The fund plans to back 16-18 startups and initially write cheques in a range of $2 Mn to $4 Mn each

The fund will primarily target ventures in sectors such as fintech, AI, global SaaS, and businesses digitising the Indian economy

Venture capital (VC) firm Prime Venture Partners has announced its fifth fund with a corpus of $100 Mn to invest in early-stage Indian startups.

In a statement, the investment firm said that its limited partners (LPs) have already committed more than 80% of the fund’s corpus. Prime Venture Partners plans to start deploying the capital from the fifth fund in the second half of 2025.

Speaking with Inc42, Prime Venture Partners’ cofounder and managing partner Sanjay Swamy said that the new fund is expected to be fully committed later this year.

The fund plans to back 16-18 startups. While the VC firm will initially write cheques in a range of $2 Mn to $4 Mn, it has kept the door open for further investments of up to $12 Mn each in its portfolio companies over multiple rounds.

The fund will primarily target ventures in sectors such as fintech, artificial intelligence (AI), global SaaS, and businesses digitising the Indian economy.

As of now, Prime Venture Partners is yet to fully deploy its fourth fund and will be fully allocated by mid-2025. Startups backed from Fund IV include FinAG, Hitwicket, Ocean, Navdan, and Metafin. The firm has also invested in TheBox, a WhatsApp-based small business platform, and Alchemy, a B2B cross-border chemicals marketplace.

Elaborating on the VC firm’s “disciplined investment approach”, Swamy said, “We started Prime to work alongside founders, providing the kind of support we wished we had when we were entrepreneurs. Very few funds make it to their fifth edition, and we’re grateful to our founders and LPs who have helped build this institution.”

While AI and SaaS will remain Prime Venture Partners’ core investment areas, Swamy sees a shift in the way startups are building products. According to him, AI-driven vertical SaaS startups are creating opportunities that didn’t exist before. He added that while foundational AI models require massive capital, vertical applications in areas like healthcare, legal tech, and manufacturing automation can solve real-world problems at scale.

On the firm’s investment philosophy, Swamy noted that Prime Venture Partners prioritises long-term sustainability over rapid growth. “We don’t believe in growth at all costs… A company doesn’t need to be profitable from day one, but it must have a clear path to profitability. Capital is a tool, not a weapon. Any company that thinks otherwise is a red flag for us,” he added.

The fund announcement comes at a time when more and more investors are hedging their bets on early-stage startups despite the ongoing funding winter. As per Inc42 data, seed stage startups raised $893 Mn in 2024, up 31% from the $681 Mn raised in the preceding year.

Not just this, VCs are lining up LPs to launch funds. Last month, Info Edge obtained its board’s nod to invest up to INR 1,000 Cr in its upcoming IE Venture Investment Fund III. Right after that, PE firm JV Ventures’ life sciences-focussed arm Innovation Acceleration Platform (IXP) announced its maiden INR 200 Cr fund to invest in early-stage startups.

Earlier this week, former Venture Highway executive Aviral Bhatnagar’s VC firm, A Junior VC, closed its first INR 100 Cr fund, which will target pre-seed investments in India. Together Fund also said that it is aiming to mark the final close of its $150 Mn Fund II by June.