Bengaluru based StartupXseed ventures announced its second fund of ₹200 Crore, that will focus on primitive stage investment in startups concentrated on deep technologies.
The sector-agnostic seed and primitive stage venture capital fund were invented before 5 years by B.V. Naidu, former director, Software Technology Parks of India, Mohan Das Pai, co-founder of Aarin Capital, Ravi Thakur, and other entrepreneurs. From about ₹200 Crore, ₹65 Crore has been taken up from individual technocrats and the balance amount will be intensified over the next 6-9 months. Fund II will finance between ₹3-₹10 crore in emerging deep tech startups from SaaS to Spacetech involving cybersecurity, silicon IP, health tech, fintech, and agritech and AI/ML. B.V Naidu, Managing Partner, StartupXseed stated that in Fund II, they will continue to concentrate on Deep Tech companies with capital efficient business models. Their strategy has worked out very well in Fund I and is indicated in the performance. Over these years, they have built a team, quality deal flow network, deal evaluation framework, post-investment hand-holding, and demonstrated exits.
Fund I investment saw three withdrawals and include companies like Bellatrix, CloudSEK, DarwinBox, ShieldSquare, Siliconch Systems, Singularity Dynamics, SmarterBiz, and Steradian Semiconductors. Naidu also mentioned that the portfolio continues to be healthy and these companies are on a growth path in spite of the current global situation. Fund I returned 35% of the principal before it had completed the final absorption and investment cycle. Naidu feels that deep tech and B2B has less affected by COVID-19 and given their past performance and continue to focus on intense tech, adding a few more verticals. Ravi Thakur, co-founding partner, StartupXseed mentioned that they were focusing on seed-stage funding in Fund I and Fund II will look at seed to early growth stage so they will pick up a little bit more fairness, the horizon is looking good for investment with many advanced technologies being spread locally.
Beyond funding, StartupXseed helps the startups in their journey of building a durable business, by providing tactical support through market access through Mentorship, Corporate Governance, and joins them with investors. T.V. Mohandas Pai, co-founder Arin Capital stated that StartupXseed has found its slot and unique positioning amongst venture funds. It will continue to improve its Fund I performance. India is now at the point of building technology innovations and startups are at the core of it playing an essential role and venture funds like StartupXseed yield the growth of these startups.
