Artha India Ventures marks first close of Rs 250 Cr Fund II

Artha India Ventures has secured ₹250 crore for the first close of its second fund, targets a total corpus of ₹500 crore with a green-shoe option of ₹100 crore, aimed at supporting seed-stage startups in India.

The company said the fund has already secured over 50% of its target commitments and plans to invest in 36 seed-stage startups across four themes: premium consumption, fintech infrastructure, applied AI, and deeptech.

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Artha, which has previously backed companies like Agnikul Cosmos, Everest Fleet, and InstaAstro, plans to write initial cheques of ₹4 crore and follow-on investments of ₹8–16 crore under its proprietary 1-2-4 model. The fund aims for 15–20% ownership in top portfolio companies and will operate on a four-year deployment cycle.

According to the firm, the fund’s limited partner (LP) base comprises roughly 80% domestic capital and 20% foreign capital, with 90% of first-close commitments coming from Indian LPs, including family offices and exited founders. The remaining 10% came from international investors.
Early backers include DSP Family Office, Shahi Group, and several founders from Artha’s previous investments.

“AVF II is launching at a time when the startup ecosystem is undergoing a reset. In the last 8 months, barring one, India has recorded fewer than 100 seed investments per month, the lowest in nearly a decade. More tellingly, the graduation rate from Seed to Series A, historically 1 in 9 startups or around 12–13% over 36 months - that rate has dropped to as low as 5-6% in recent months. That tells you how capital-starved the early-stage investment ecosystem has become,” said Anirudh A Damani, Managing Partner at Artha Venture Fund. 

The firm’s second fund follows the strong performance of its first fund, which had a target corpus of ₹225 crore, launched in FY19 and closed in July 2021. In June, the firm reported an internal rate of return of 61%, with its portfolio valuation exceeding ₹750 crore.

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Founded in 2012 by Ashok Kumar Damani, Artha is a SEBI-registered micro VC firm that has invested in 140 startups since its inception. Its portfolio includes companies like OYO, rapido, purplle, Everest Fleet, Agnikul Cosmos, and InstaAstro.

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