Axilor Ventures, a seed-stage investor, is launching Axilor Technology Fund – II (ATF-II), its second technology fund, worth USD 100 million, to increase its investments in Indian entrepreneurs while maintaining its focus on seed possibilities.
ATF-II anticipates closing by the end of September and seeks permission from the Securities and Exchange Board of India (Sebi).
The launch of Axilor’s new fund coincides with a decline in overall startup funding in India, which fell to USD 6.9 billion from USD 11 billion from April to June. Further, the investments and values of technology companies continue to suffer from the effects of the global macroeconomic downturn.
Early-stage investments have emerged as the sweet spot as top-tier Indian venture capital (VC) companies rush to back entrepreneurs early. However, as late-stage investors take a cautious approach to investments, growth-stage funds continue to park capital for their existing portfolios.
Axilor’s most recent corpus is nearly four times greater than its previous closing as the seed investor seeks to keep supporting businesses in the fintech, healthcare, agritech, and enterprise software-as-a-service (SaaS) and supply-chain technology sectors.
It intends to use a significant portion of the most recent money to support companies that develop business-to-business (B2B) software for the Indian and international markets.
Tarun Khanna, Srinath Batni, and Ganapathy Venugopal are additional fund creators.
Ganapathy Venugopal, chief executive of Axilor Ventures stated:
“The first fund was focused on identifying the product-market fit for us, and we actively searched for entrepreneurs and business models that matched our investing premise. We now anticipate a USD 1 trillion opportunity in digitalization over the next five years.
We are seeing huge global sectors like BFSI, auto, and steel targeted by global enterprise SaaS firms being established out of India. Therefore, there are intriguing chances to establish USD 100 million ARR (annual run rate) businesses.”
The seed-backer plans to recycle the capital through returns and exits, therefore, the new fund’s deployment duration is anticipated to be longer than 12 years, Venugopal stated. The new fund will support portfolio companies and cross-over prospects to about 30%, according to the statement.
However, the fund will keep up its pace of investing in 10 to 12 firms a year, writing initial seed cheques between USD 750,000 and 1 million, and acquiring an average 10 to 12 percent share. It will also aim to write follow-up checks totaling USD 2–3 million based on performance.
Axilor’s second technology fund is expected to support 100 and 125 new businesses.
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