India’s Fundraising Winter Sees Micro-Venture Capital Pouring Heavily Into Early-Stage Deals

As early-stage deals in India keep the startup story burning, many micro-venture capital (VC) funds are looking to invest in India. Last month, India-focused early-stage venture capitalist Speciale Invest launched its first growth fund, valued at over $24 million, focused on deep science and enterprise technology.

Among other things, BoldCap launched his second fund in April with a capitalization of US$25 million to invest in his 15-20 early-stage startups, and Chanakya Fund his trust is the first launched his US$12.5 million as a non-industrial fund of Small and medium-sized enterprises. CapFort Ventures is believed to be awaiting approval from the Indian Capital Markets Regulator to launch its first fund.

“Entrepreneurship is booming in India,” said Abhimanyu Bisht, General Partner of CapFort Ventures. “In the early stages, we have a lot of great ideas that we need to work together across the capital. , the asset class has become a welcome one.” According to DealStreetAsia’s own data, early stage deals as a percentage of total funding increased quarter over quarter.

And despite the fact that startups around the world, especially those in the growth phase, are facing a funding winter in the face of macroeconomic headwinds. Micro VCs typically have less than $30 million in capital.

They operate primarily in the pre-seed and seed sectors, with few companies participating in post-seed rounds. Investors in these funds primarily include high net worth individuals (NHIs), family offices, funds of funds, listed companies and corporations. Industry observers expect the number of micro VCs to grow in India as HNI household savings shift further from physical assets to financial assets.

According to a Bain & Co-IVCA report, micro VCs will surge in 2022 and the number of such funds will grow from 65 to more than 80 in 2021-22. By September, at least 13 micro VC funds had sprung up to raise money and provide much-needed venture capital and hands-on mentorship to the country’s young startups. Experts say they are now in fierce competition for the angel network. “The ability of angels to conduct follow-up audits is very low.

“For follow-up rounds, startup founders will have no choice but to look for new investors who are more professional and can ensure a steady flow of funds for their continued operations.” As a result, the market is moving towards micro VCs. ”

(WITH INPUT FEED)