How Endiya Partners Sharpened Its AI, Deeptech Thesis Over The Past Decade

Back in 2016, when Endiya Partners

launched its maiden INR 175 Cr fund, the Indian startup ecosystem was still early in its innings. And the Hyderabad-based fund’s thesis was simple yet bold — backing high-impact, scalable ventures across enterprise tech, deeptech, and healthcare.

Nine years later, the results speak for themselves. The firm’s maiden fund delivered a stellar 4.0x Multiple on Invested Capital (MOIC), with marquee success stories like HR tech startup Darwinbox which went on to achieve unicorn status.

Fast forward to 2025, Endiya has successfully closed Fund III, securing institutional backing from heavyweights like the International Finance Corporation (IFC) and the Asian Infrastructure Investment Bank (AIIB). With this fresh capital, the firm is doubling down on its early-stage investment strategy, and will increase its focus on AI startups.

Speaking to Inc42, Endiya Partners managing director Sateesh Andra credited the success to the firm’s concentrated strategy, leading pre-Series A rounds and maintaining a deep involvement throughout the startup’s journey, instead of the typical strategy of a large fund which spreads capital thinly across a wide array of startups.

This operator-VC hybrid means Endiya actively assists portfolio companies with product rollouts, customer acquisition, hiring, and preparing for future fundraising rounds. In the early to growth stage, this is a critical competitive advantage for the fund.

In terms of capital allocation, Endiya looks to lead rounds, typically deploying INR 40-50 Cr per company over multiple rounds. The firm also collaborates with its limited partners (LPs) for co-investments in later-stage rounds, ensuring continued support as companies scale. While IPOs remain a coveted milestone, Andra noted that only 15-20% of Endiya’s portfolio is expected to go public, with most exits occurring through secondary transactions and strategic acquisitions.

Here are edited excerpts:

Inc42: When you started Endiya Partners, what was your overall investment thesis and vision, and how has it evolved over the past few years?

Sateesh Andra: Currently, we are investing from our third fund. We launched Endiya Fund-I in 2016 as an early-stage, thesis-driven fund with a strong focus on product startups—primarily B2B Indian startups. Some of these companies target the Indian market, others focus on regional markets, and a significant number pursue global opportunities.

Fund-I was centered on SaaS, cybersecurity, semiconductors, and digital health companies. With Fund-II, we expanded into biotech while continuing to strengthen our investments in SaaS and digital health. We also started investing in intelligent mobility companies.

Now, with Fund-III, we are heavily focussed on AI and data, alongside continued investments in security, semiconductors, robotics, and healthcare. Occasionally, we also invest in fintech companies. From a thesis perspective, our approach has remained consistent—we don’t make drastic shifts but rather add new themes over time while staying true to our core focus areas.

As thematic investors, we specialise in early-stage investments, often acting as the first institutional investor. We adopt a portfolio-operator mindset, actively supporting our companies in rolling out products, gaining customer traction, hiring talent, and securing growth capital. This approach has yielded strong results— for every dollar we invested in Fund-I. Our portfolio companies raised up to $50 Mn in follow-on rounds from investors like Peak XV, Accel, Lightspeed, Eight Roads, Vertex, KKR, Partners Group, Temasek, TCV, Salesforce, and Microsoft.

Inc42: How do you approach follow-on funding, and what factors influence your decision to double down on existing investments?

Sateesh Andra: We typically lead or co-lead pre-Series A rounds in almost all of our portfolio companies. At the Series A stage, we participate on a pro-rata basis across all our investments. For Series B, we selectively continue with pro-rata investments. This approach is why we end up investing around INR 40 Cr – INR 50 Cr per company. Additionally, some of our LPs participate in co-investments at the Series C stage. That’s our strategy from a portfolio perspective.

Inc42: In particular, which sectors are you most bullish on? Will the focus be primarily on AI, or are there other areas of strong interest as well?

Sateesh Andra: We’ve been investing in AI since Fund-I. For instance, one of our Fund 1 investments was SigTuple, an AI-powered technology company. In Fund-II, we backed Expertia, an AI-driven hiring and recruitment platform. Another Fund-II investment was Myelin, an edge AI company.

So, AI has always been a key focus for us, and we continue to double down on it. With each fund, we also introduce one or two new sectors. This time, alongside AI, we see significant potential in data security, including data privacy and compliance, which has become increasingly important. Semiconductors remain another deep-tech area where we continue to invest, given our strong focus on tech-driven companies with IP.

Additionally, we will maintain our investments in digital health and biotech, which have been core sectors for us.

Inc42: How will your overall deployment strategy differ from earlier funds in terms of both ticket size and diversification?

Sateesh Andra: We are not generalists, we are specialists. Our approach has always been focused and thesis-driven. Typically, we make around 18 investments over two and a half years, averaging six to eight investments per year.

We have a strong investment team, including myself, Dr. Vedha, Raghav [Gupta], and several others. With this structure, each partner typically leads a couple of deals per year.

In terms of ticket size, our investments have grown. Previously, we would invest up to INR 25-30 Cr per company. Now, we go up to INR 50 Cr, spread across multiple rounds. The initial round may see an investment of INR 20-25 Cr, with an additional  INR 20 Cr or more in follow-on rounds.

Our approach ensures that portfolio companies receive significant backing from us, along with co-investors who join later, enabling them to scale effectively.

Inc42: With the changing macroeconomic and geopolitical landscape over the past year and a half, did you face any challenges in raising the third fund? 

Sateesh Andra: Raising a fund is always challenging because LPs focus on performance and track record. They evaluate the thesis, its differentiation, and whether the team can execute it effectively. In many ways, this mirrors how VCs assess startups — looking for a strong problem statement, a capable team, execution ability, and a large market opportunity.

Similarly, LPs writing checks for GPs consider whether the investment strategy is unique, if the team has a solid track record, and if they have demonstrated past success.

That said, macroeconomic cycles play a significant role. During bull markets — like the post-Covid era with near-zero interest rates — startups secured funding frequently, often at high valuations with minimal time gaps between rounds. That dynamic has shifted.

For funds, the challenges are similar. Macroeconomic conditions, geopolitical factors, and broader market uncertainties all influence fundraising. Successfully raising and deploying capital now requires navigating these complexities while consistently demonstrating progress.

Inc42: What key factors are you currently prioritising when evaluating startups in AI?

Sateesh Andra: We evaluate startups across four key buckets when it comes to AI.

AI users include almost every company today, leveraging AI for content writing, SEO, coding, customer support, sales, and various other functions. AI pioneers, on the other hand, are a much smaller group. There are very few true AI pioneers in India, that is companies that are actually pushing the boundaries of AI innovation rather than just using it.

AI at the core refers to businesses where AI is not just a tool but the fundamental backbone of the company. For example, Expertia is an AI-first business, and Pulse, an AI product ops company, operates entirely on AI. The very thesis of these companies is built around AI.

AI extensions are companies that build AI-powered add-ons on top of existing platforms. For instance, if you take Darwinbox, AI extensions could include an AI-powered recruiter, an AI-driven payroll system, or an AI performance agent.

When evaluating AI startups, we focus primarily on companies that have AI at their core—those where AI is fundamental to their business model and not just an add-on. That’s the segment we actively pursue.

Inc42: There’s been a lot of discussion around the future of SaaS, especially with the emergence of AI startups. Some believe that the sector might face challenges going forward. What’s your take on this? 

Sateesh Andra: So globally, there’s a lot of debate—will SaaS survive or perish? I think people often overestimate technology’s short-term impact and underestimate its long-term potential. AI will automate many aspects of SaaS, but the real question is: can established players like Salesforce, Microsoft, Google, ServiceNow, or even Darwinbox—at $100M ARR—integrate AI faster than new AI-native startups can disrupt them?

In some sectors, AI-first companies will become dominant players. But in many cases, incumbents will also roll out strong AI capabilities. For customers, it ultimately comes down to getting the right functionality at the right price. The real race is whether legacy SaaS players can evolve quickly enough or if AI-native startups can scale, acquire customers, and build a brand fast.

The SaaS industry isn’t disappearing—this is more noise than reality. However, pricing models may evolve from subscriptions to transaction-based or outcome-based pricing. Software development is also becoming easier with AI copilots like Cursor, API automation, and increasingly powerful AI agents.

Inc42: What gaps still need to be addressed in India’s AI and startup ecosystem for Indian startups to compete globally?

Sateesh Andra: India’s AI ecosystem lacks deep-tech infrastructure such as high-performance compute, horizontal LLMs, vector databases, and AI data centers, which are capital-intensive and not widely developed in the country. Instead, most Indian startups focus on AI applications—both horizontal and vertical—leveraging existing models rather than building foundational AI infrastructure.

While India may develop some AI chips, they are unlikely to compete with Nvidia but could serve specific local needs. Similarly, Indian startups will likely lead in creating regional language LLMs, as global players are less likely to prioritise them. The country’s strength will be in building AI applications, particularly agentic and autonomous AI-driven solutions, rather than competing in foundational AI infrastructure.

Inc42: With multiple VC firms launching AI and deeptech-focused funds, how does Endiya Partners differentiate itself in supporting startups beyond capital?

Sateesh Andra: As specialists, we bring deep domain expertise and a hands-on approach to venture investing. In our first fund, every dollar we invested helped portfolio companies raise $50 from other investors, demonstrating the rigor of our selection process.

Intelligent entrepreneurs see capital as a commodity and ask, Why should I take this money from you? That’s the question we challenge ourselves with daily. Our relevance comes from being an operator VC, actively helping startups with product rollouts, customer traction, hiring, and preparing for subsequent funding rounds. These aren’t just promises—our track record speaks for itself.

We were the first investors in companies like Zluri, Kissht, EyeStem. Unlike large funds that make only a handful of early-stage bets due to their size, our entire focus is early-stage investing. This, combined with our domain expertise, co-founder-style involvement, and commitment to allocating up to INR 50 Cr per company, sets us apart from firms that follow a “spray and pray” approach with small checks across many startups.

Inc42: Do you see more of your portfolio companies moving towards public markets, or do you anticipate increased M&A activity and secondary exits?

Sateesh Andra: For our first fund, we do have a few IPOs in the pipeline, but most of our portfolio companies are still in growth mode. In terms of exit strategies, we anticipate only a few IPOs—this is the case across the industry. For an early-stage or Series A-focused VC like us, typically around 15-20% of investments make it to the public markets. If we invest in 20 companies, at best, 2-3 might go for an IPO. Beyond that, we expect a mix of strategic acquisitions—around 4-5 companies—and the majority of exits will come through secondary transactions.

[Edited by Nikhil Subramaniam]