Artha fund raises ₹100 Cr in the second close of its debt fund

Key Highlights

The micro early stage VC fund Artha has announced a second close fund which is valued at over ₹100 Cr.

This announcement was made by Anirudh A Damani who is the fund’s managing partner while attending a get together that was held in Mumbai.

The funds will be primarily utilized in investing in logistics, payment apps and gateways, B2B and fintech sectors.

The micro early stage VC fund Artha has announced a second close fund which is valued at over₹100 Cr. This fund invests in start-ups right from the seed stage to Series A funding round and is a Category I investment fund.

This announcement was made by Anirudh A Damani who is the fund’s managing partner while attending a get together that was held in Mumbai. Around 250 people from the VC and start-up ecosystem attended this event.

In a statement, Damani was quoted saying that the investment style of AVF is an amalgamation of Indian pragmatism and Western Ethics. The fund is usually put 1-2 crore in early-stage companies and is usually the first investor in the same. They also have ₹10-15 crore in reserve for the later rounds. Thus, 65% of the fund’s reserves are stored for investing in the follow-up rounds.

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The fund had made its first close at 40 Crores in July 2018. A close of fund allows the fund to start investing in potential businesses while being on a lookout for more investors. They announced their first investment in a P2P lending company, LenDenClub. Their other investments include Kabaddi Adda, a site that deals with online kabaddi, Haazti which is swift service restaurant that caters to corporate workers and Jadooz, a tier 2 and tier 3 town entertainment zone developer. The fund is also expected to make a final close of ₹200 crores by 2020.

Artha currently has set a target of completing 15 investments by March 2020 at the pace of one investment per month. It also claims that its ratio on follow on investments is 1:10. The funds will be primarily utilized in investing in logistics, payment apps and gateways, B2B and fintech sectors. Damani said that their fund was bullish about offline as well as online consumptions. Keeping that in mind, every company needs technology to automate repetitive functions and grow efficiently.

Artha has a consumption focus but plans to invest in business-to-business start-ups and software-as-services companies as well. These services reduce the operating cost of a company and help the company attract more customers.

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Damani also added that their fund is specific on valuations and usually expect a 10-15% stake at ₹7-10 crore valuation. The fund plans on increasing the stake to 30% by the series A funding round. The stakes usually get diluted at this stage as more investors come on board.

Artha had raised capital from a number of investors such as owners of listed companies who invest via their family offices for its debt fund. These companies include HNIs from Gulf, India and the US.

Before working with AVF, Anirudh Damani had been investing in start-ups via Artha India Ventures, his family office for 7 years. He has invested in over 70 start-ups including OYO, Interstellar, Karza, Tala, BabyChakra, Fynd, Coulloot and Exotel.  

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