StartupXseed Announces First Close Of INR 200 Cr Fund To Back Deeptech Startups

StartupXseed Ventures, that launched Aaruha Technology Fund for burgeoning startups in deep tech, has made the first close of its second investment vehicle – at INR 65 Cr, and is looking to raise a corpus of INR 200 Cr over the next 6-9 months.

It will focus on placing bets across deep technology, including, semiconductor, cyber security, drone and aerospace sectors. It will also look at the artificial intelligence and machine learning segments.

Fund-II also has a green shoe option of INR 50 Cr. It has been backed by a number of family offices and professionals from the information technology sector.

StartupXseed Ventures counts former Infosys senior executives, TV Mohandas Pai, invested from his fund Aarin Capital, and V Balakrishnan who pitched in his personal capacity, as general partners.  

According to BV Naidu, managing partner and Ravi Thakur, co-founding partner, the fund’s general partners have put in a little over a third of the total fund corpus. The Sebi-registered, Category-I Alternative Investment Fund will look to make 15-odd investments, writing a first cheque of between INR 3 Cr and INR 10 Cr.

Thakur said that around 12 companies are in his radar, which operate across the ad-tech, cloud-tech and Internet of Things (IoT) sectors.

Commenting on the occasion Pai said, “StartupXseed has found its niche and unique positioning amongst venture funds.  It will continue to build on its Fund I performance. India is today at the cusp of building technology innovations and start-ups are at the core of it playing a pivotal role and Venture funds like StartupXseed catalyses the growth of these start-ups.”

Jayant Paleti, co-founder, DarwinBox, (StartupXseed Fund I Portfolio Co) said “The StartupXseed team has demonstrated great commitment towards the startup ecosystem and have always kept the interests of founders at the forefront in every decision they take. They have exhibited great sensitivity & care while working with us and we have benefited immensely from their involvement.”

StartupXseed has made its first investment in Bengaluru-based ShieldSquare and it also announced the MoU’s with leading Incubators in Bangalore set up by IIITB, Dayanand Sagar University and eHealth Technology Business Incubator in PES University.

Deeptech is also the key focus of the government’s Aatmanirbhar Bharat scheme. The Department for Promotion for Industry and Internal Trade (DPIIT) said last week that import substitution and export boost will be the spotlight.  

Inc42’s DataLabsPlus report revealed that in the first quarter of 2019, the deeptech sector recorded a total investment of $9.58 Mn, a mere 1% compared to ecommerce ($958 Mn).