Upekkha Eyes Early-Stage AI Startups; Announces First Close Of $40 Mn SaaS Fund

Upekkha Eyes Early-Stage AI Startups; Announces First Close Of $40 Mn SaaS Fund

SUMMARY

Bengaluru-based SaaS fund and accelerator Upekkha has announced the first close at $15 Mn for its latest fund led by WestBridge Capital

The fund will look to invest in up to 70 startups per year with a fixed $125K pre-seed funding for 7% equity, similar to the older Y Combinator standard deal

Upekkha managing partner Prasanna Krishnamoorthy says the fund's USP is the referral programme that is led by established SaaS founders

The reality of the SaaS and enterprise tech sector has been upended in the past year, as generative AI and emerging technologies threw up new challenges for startups, and investors. And in 2024, many are revisiting their thesis to pare away from late-stage bets and look at early stage investments that have the biggest upside.“One way we have made our deal flow and pipeline more robust is the referral programme, where founders in the community bring in potential investments for us. This makes a very strong funnel for our deal flow, since SaaS founders know what kind of products will have the best impact and they often also know the founders running these startups since SaaS is a tight-knit community.”“Some startups add features that are powered by AI, some of them leverage LLMs for operational efficiency and increasing margins. Every SaaS company has one on the other approach, but the ones who are able to get enough data and do things end-to-end with AI will see the biggest adoption.”“We are not focussing on any particular functionality or vertical, but the idea is to find the startups that are doing 5X or 10X more with AI — whether that is in product development or business — than what is possible otherwise. The most critical piece within that is data, so you know how to differentiate the service or software you deliver” he added.

For Bengaluru-based Upekkha, this means deepening the focus on AI and Indian startups building B2B software products for the world. The SaaS fund and accelerator has announced the first close at $15 Mn of the larger $40 Mn Upekkha fund, its second such fund in two years.

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