Hyderabad-based venture capital firm Pavestone VC, which invests in early- and growth-stage companies, has closed its maiden fund with a corpus of Rs 816 crore or about $97 million.
The firm had launched Pavestone Technology Fund in July 2021, aiming to raise Rs 600 crore initially, but lifted the size of the fund twice through greenshoe option to accommodate interest from investors, it said.
VCCircle reported on the fund plan’s to raise Rs 700 crore last year in May. It later increased the target size to Rs 850 crore.
The fund has received commitments from large family offices and domestic and international institutional investors. Its limited partners (LPs) include the Self-Reliant India (SRI) Fund, the family office of Mankind Pharma promoters, and Colruyt Group India, among others.
“We’re delighted with the final close exceeding our initial target. This outcome reflects our vision and commitment to rigorous analysis and strong governance in our investment approach,” said V Laxmikanth, managing partner at Pavestone.
Laxmikanth, along with Sridhar Rampalli and Srikanth VJ Tanikella, set up the firm in 2021. The fund marked the first close in March 2022 and a second close in August 2023.
Primarily, Pavestone intends to back early growth-stage firms that solve problems of large enterprises in the business-to-business space. It will also make selective investments in early-stage companies working on advanced technologies.
It intends to build a portfolio of about 15 companies. The fund has reserved about 30% of the capital for follow-on rounds.
About 80% of the investments will be across startups catering to enterprise, where it will infuse about $5-10 million in each company. "We have a small bucket, about 20% for startup having cutting edge engineering/ scientific element, where we would write smaller cheques" said Laxmikanth
So far, the fund has deployed about 30% of the capital. It has invested in about five companies: E42, Bellatrix Aerospace, LivNSense, NewSpace Research & Technologies, and Cynlr.
"We are seeing interest across all sectors including automotive, supply chain, FinTech and logistics. A lot of this interest is driven by AI," he added.