Artha India Ventures launches ₹500 crore Artha Venture Fund II, secures ₹250 crore in first close

Artha India Ventures (AIV) announced the first closing of ₹250 crores for its second early stage microVC fund, Artha Venture Fund II (AVF II). The fund aims for a total corpus of ₹500 crores, including a ₹100 crore green-shoe option. It has already secured over 50% of its target commitments, demonstrating strong investor confidence in Artha’s conviction-led approach and proven success.

AVF II plans to invest in 36 seed-stage startups across four themes: premium consumption, fintech infrastructure, applied AI, and deep tech. It will initially allocate ₹4 crore per investment and follow up with ₹8–16 crore investments, using its proprietary 1–2–4 model. The fund aims for 15-20% ownership in its top portfolio companies and will operate on a four-year deployment cycle.

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

The fund’s capital structure will stay approximately 80% domestic and 20% global, with 90% of first-close commitments from Indian LPs, including family offices and exited founders, and the remaining 10% from international investors. Early supporters of AVF II include the Shahi Group, Narendra Karnawat (Glance Finance), DSP Family Office, and several founders from Artha’s earlier investments who have since achieved successful exits.

What’s exciting for us as investors is that this environment filters out the noise. The tourist founders are gone; what’s left are serious entrepreneurs building sustainable, capital-efficient businesses. They’re focusing on raising from customers before VCs - that’s exactly the kind of DNA that creates vintage funds,” he further adds.

AVF I’s portfolio of 32 companies includes Agnikul Cosmos, Everest Fleet, LenDenClub, Daalchini, InstaAstro, and GetWork, many of which have become category-defining leaders. With multiple exits and strong performance, it sets new benchmarks for early-stage investing in India.

“Our 2016 and 2017 portfolios demonstrated the power of investing in resilient founders during uncertain times — 7 out of 7 exits in 2017 with a 111% IRR and 16x multiple, while our 2016 portfolio delivered nearly 21x returns. We see several parallels today and believe 2025 is shaping up to be another such once-in-a-decade opportunity,” he added.

AVF II’s core strategy is to prioritize fewer, higher-conviction investments. The fund will selectively support startups that are post-seed, post-revenue, and raising ₹4–10 crore rounds. Capital will be allocated to ensure consistent backing for breakout performers.

“Our goal is to double down on companies showing deep founder conviction, efficient capital usage, and clear revenue visibility. AVF II is not chasing volume; it’s chasing velocity, i.e., concentrated capital behind exceptional founders,” added Damani.

With over 150 Limited Partners, co-investors, and global partners, Artha India Ventures offers a robust ecosystem of mentorship, strategic guidance, and market access. The fund’s “family-office DNA” provides it with a uniquely long-term outlook. It is built to support founders from seed stage to success, leveraging the Artha platform, which now manages ₹1,500 crores across multiple funds and has 135+ investments with 34 exits so far.