Speciale Invest, a venture capital firm focused on deep tech and software-as-a-service (SaaS) investments, has marked the final close of its second fund at Rs 286 crore and plans to make its first Web3 investment.
The size of the new fund is higher than its original target corpus of Rs 100 crore. The second fund had already raised Rs 120 crore in April last year.
Vishesh Rajaram, Managing Partner at Speciale Invest, told VCCircle that the huge oversubscription of the second fund shows that there is an appetite for doing deep tech investments in India.
The deep tech market in India currently is where consumer tech was in 2008-10 and it is going to take a few years before it sees a huge inflection point, explained Rajaram, a former principal at venture capital firm Ventureast.
"This (the new fund) will enable us to continue this journey of investing in disruptive innovations that are deeply rooted in multiple streams of science, engineering, technology and sustainability," said Arjun Rao, General Partner at Speciale Invest in a separate statement.
Almost all the Limited Partners (LPs) from its first fund doubled down on its second fund and increased their exposure, said Rajaram. The second fund was largely (around 95%) raised from domestic investors. Its debut fund, which raised Rs 60 crore in 2017, was entirely raised from local investors.
The LP profile comprises of founders of SaaS companies, family offices/promoters of large conglomerates, mainly from manufacturing and technology sectors, and senior professional from fast growing companies.
The new fund aims to invest in over 20 startups through pre-seed and seed rounds. The average cheque size will range from $100,000-$1 million. It also aims to reserve a significant portion of the fund for follow-on deals. While its first fund set aside one follow-on dollar for every greenback it initially invested in a startup, the second vehicle wants to bulk out the follow-on bit to three greenbacks.
The venture capital firm invests in startups building enterprise software products including SaaS and Developers tools and frontier technologies including climate, advanced materials, space tech, robotics, photonics, and alternative energy.
Speciale Invest's Rao, who had earlier co-founded Travel Yari, also said that the venture capital firm expects to make its first investment in the Web3 space from the new fund.
"Web3 is moving very fast and given the really hot nature of it we have to learn and decide which are really fundamental innovations as opposed to fleeting short term ones. At the right time and for the right team we will have the capital," he said.
Speciale Invest's portfolio firms include aerial mobility startup ePlane, space-tech startup Agnikul, VR and AR platform Scapic Innovations, and Frontdesk AI, a startup which offers automated customer service and Looppanel, software development, and WordsWorth Tech, Inc, which operates software-as-a-service (SaaS) startup StreamAlive.
Speciale Invest is one of the few early-stage deep-tech focused venture capital firms in the country.
Other such deep-tech-focused investors include Bharat Innovation Fund and Arali Ventures. Sector-agnostic venture capital firms such as Endiya Partners Pi Ventures and Blume Ventures have also been investing in this space.
Last year, several early-stage VC firms announced fundraising milestones. Chiratae Ventures, Stellaris Venture Partners and WaterBridge Ventures announced the final close of their new funds and Blume Ventures announced the first close.
The fundraising momentum is continuing in 2022 as well. Earlier this year, Accel India, an early backer of startups such as Flipkart and Freshworks, raised $650 million in commitments for its seventh fund to invest in new opportunities like emerging tech across India and Southeast Asia. In February, early-stage venture capital firm Prime Venture Partners marked the final close of its fourth fund at $120 million.
