Artha India Ventures (AIV), a leading Mumbai-based venture capital firm, has marked a significant milestone with the first close of its second micro-VC fund, Artha Venture Fund II (AVF II), raising ₹250 crore. The fund aims to eventually reach ₹500 crore, with an additional ₹100 crore available through a green-shoe option. This move comes at a crucial time when early-stage funding in India has slowed, making AVF II one of the most promising sources of capital for startups in the country. With a clear focus on growth sectors, the fund aims to provide strong support to entrepreneurs building innovative and scalable businesses.
Targeted Investment Strategy
AVF II is designed to back startups in sectors poised for rapid growth. The fund will focus on premium consumption, fintech infrastructure, applied artificial intelligence, and deep technology solutions. By concentrating on these areas, AIV aims to support businesses that can transform markets and deliver long-term value. The fund plans to invest in around 36 startups, starting with an initial allocation of ₹4 crore and follow-on investments ranging between ₹8 crore and ₹16 crore. For the most promising companies, AIV intends to acquire a 15–20% stake, ensuring that its capital is strategically aligned with the growth trajectory of its portfolio.
Experienced Leadership
The fund is spearheaded by Ashok Kumar Damani, an experienced entrepreneur and investor with a proven track record. Under his guidance, the firm’s first fund, Artha Venture Fund I, raised ₹225 crore in 2021 and backed notable startups such as Agnikul Cosmos, Everest Fleet, and LenDenClub. AIV’s leadership combines deep industry knowledge with a hands-on approach to mentoring startups, which helps portfolio companies navigate early challenges while scaling effectively. For AVF II, commitments have been secured from a mix of domestic and international investors. Around 90% of the first close capital comes from Indian limited partners, including family offices and exited founders, with the remainder contributed by global investors. This diversified support base strengthens the fund’s ability to invest consistently in high-potential startups.
Filling the Funding Gap
India’s early-stage startup ecosystem has experienced a slowdown over the past several months. On average, fewer than 100 seed-stage investments have occurred per month, marking the lowest activity in nearly a decade. In this context, AVF II plays a critical role in bridging the funding gap and supporting entrepreneurs who are building capital-efficient and sustainable businesses. The fund emphasizes quality over quantity, concentrating resources on founders with strong visions and innovative ideas. By providing not only capital but also strategic guidance, AIV is positioned to help startups accelerate growth despite a challenging funding environment.
Shaping the Future of Indian Startups
Artha India Ventures’ second fund is expected to make a significant impact on India’s startup ecosystem. By investing in emerging sectors and supporting early-stage ventures, AVF II aims to nurture innovation and technology-driven growth. The fund’s strategy of concentrated capital and focused mentoring ensures that startups have both the financial resources and the guidance needed to scale successfully. As AVF II deploys its capital, it is likely to influence the next wave of entrepreneurial success stories, shaping India’s position as a hub for innovative startups and sustainable business models.