Weave Capital Launches $75 Mn Fund For Early-Stage Tech Startups

SPVH Group’s venture capital (VC) arm Weave Capital has launched a multi-stage VC fund of $75 Mn with an aim to participate and lead investments in startups raising capital above seed rounds till Series B rounds.

The total corpus of $75 Mn also includes a green shoe option of $25 Mn. 

Weave Capital is a sector-agnostic fund with an inclination to fund technology-enabled businesses. Aiming for its first close at $20 Mn, the fund will commit a cheque between $1 Mn to $5 Mn across different stages of the portfolio company. 

Weave Capital aims to build a portfolio of 15 to 20 startups with an average ticket size of $3 Mn to $3.5 Mn. It will start deploying capital post the first close.

Besides, the VC firm has already filed category II Alternative Investment Fund (AIF) registration for the fund and is currently awaiting approval from the Securities and Exchange Board of India (SEBI).

“Our team at Weave has led diverse & cross sector transactions and growth advisory engagements both in India and overseas,” Weave Capital Managing Partner Karan Gupta said. “Our intent now is to build inroads and ascend our position in the new shoes of venture investing.”

Weave Capital claims to offer its portfolio startups an integrated ecosystem of technical, operational, business and strategic mentorship.

Commenting on the fund launch, Sujay Prakash, General Partner at Weave Capital and the Ultimate Beneficial Owner (UBO) of SPVH Group, said, “Today, the VCs are going beyond to create value and insights driven ecosystems. Further, we need to come out of this standard theme of ‘IRR’ and ‘exit’ and start questioning the ‘why and beyond’.”

According to the VC firm, Weave Capital’s team comes from diverse backgrounds and has experience in large transaction advisory that further helps its portfolio startups when working together. It is also actively onboarding new team members across different levels.

The fund team is now geared up to identify and build a strong pipeline of transactions and will be also keen to do warehousing in case of exceptional opportunities, Weave Capital said.

Amid global inflationary pressure and geopolitical tensions, Indian startups’ funding in the second quarter of 2022 plummeted by as much as 42% to $6.8 Bn from $11.8 Bn in the preceding first quarter, as per an Inc42 report. Overall, the funding amount in H1 2022 also declined to $19 Bn as against $32 Bn in H2 2021.

Besides, a sharp decline was also visible in late-stage funding, while seed-stage deals continued to attract investors.

However, there have been numerous fund launch announcements for early-stage startups in the country in recent days. 

Last month, Auxano Capital launched its $25 Mn Category 1 fund to invest in seed, pre-Series and Series A/Series B capital raises. LetsVenture’s cofounder Shanti Mohan also launched micro VC fund Propell last month to invest INR 50 Cr in 30 early-stage tech-enabled startups.

In June, Fundamental VC launched its first fund with a target corpus of $130 Mn to invest in early-stage startups across verticals such as consumer internet, SaaS, insurtech, healthtech, and more.

In a report, Bain & Company said that though there could be a few shifts in the pace and quality of deals, the VC funding momentum is expected to continue in Indian startups in 2022 and beyond.