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Rukam Capital’s Archana Jahagirdar On Why Domestic Capital Is The Need Of The Hour

12 Feb'25 | By Inc42 BrandLabs

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The world’s third-largest startup ecosystem has seen a fresh capital inflow of over $158 Bn in the last decade, along with 119 startups breaching the $1 Bn valuation mark. This highlights the resilience of India’s innovation-driven ventures, even amidst global economic uncertainties.

Now there is little doubt that the growth has been fuelled by investors actively backing startups to tap into a dynamic and evolving market. However, the twist in the tale is that the rapid influx of new investors into the VC space has not been without its ripples.

According to the founder and managing partner of Rukam Capital, Archana Jahagirdar, investors have rushed into the Indian market, prioritising their investments or thesis over understanding the market’s actual needs. Consequently, the focus has somewhat shifted from addressing critical gaps in the ecosystem.

Jahagirdar believes this challenge of misaligned dynamics of investments and market requirements has become even more pronounced in the past few years, underscoring the need for a more thoughtful approach to venture capital investments in the country.

Speaking with Vaibhav Vardhan, cofounder & CEO of Inc42, she said, “The point of a VC is to respond to a trend. The point of a VC is not to think about trends. When you spend so much time thinking, you’ve fallen for the sunk cost fallacy already, saying ‘I believe in this, I created this thesis and so I have to go and invest accordingly’.”

For the journalist-turned-general partner, Jahagirdar, prior knowledge of any niche is crucial before entering the VC market. She believes that the space requires investors who can build brands from scratch.

Notably, Jahagirdar launched her first venture fund Rukam Capital in 2019, raising $19 Mn to invest in early-stage consumer brands. She has backed D2C brands like GoDesi, and Sleepy Owl, through her first fund.

Aligned with the latest trends, she is currently working on Fund II and has also launched Rukam Sitara, a fund that focuses on opportunities in India’s tech space, including GenAI, robotics, semiconductors, and climate technology. Her folio of tech comprises startups such as beatoven.ai and Unscript.

Diving deeper into the conversation about the recurring need for adaptable and multi-faceted capital in India’s ever-evolving business landscape, the GP said Indian startups currently need capital that “can support multiple strategies and multiple kinds of company formation”.

She added that VCs are playing a crucial role in innovation, job creation, and entrepreneurship. Therefore, they have a huge impact on individual businesses as well as national economies.

Besides, economic development can be supported and accelerated by participating in high-growth startups.

Jahagirdar further pointed out that despite being the world’s third-largest startup ecosystem, the country lacked a flagship event to showcase its achievements. This is precisely from where the idea for Startup Mahakumbh emerged.

Spearheaded by Union minister Piyush Goyal’s vision and with Jahagirdar as one of the members of the organisation committee, the initiative is aimed at creating a platform where startups, government, and private stakeholders could collaborate.

“I think it’s rare for government and private sectors to work so closely,” she said.

Notably, this kind of collaboration has come at a time when India’s startup ecosystem has grown exponentially in the last decade, as mentioned above.

Therefore, Jahagirdar advocates for a capital market environment that helps in scaling up businesses and innovations by the entrepreneurs towards the fulfilment of national goals to create lasting economic value. Meanwhile, the VC also emphasised the critical need for domestic capital to drive the growth of startups, especially in India.