5 VC firms for early-stage startups in India

Over the last decade, the business landscape in India has seen startups across sectors mushrooming and blooming. New technologies, innovations and investments have left the ecosystem buzzing, creating employment and inspiring more entrepreneurs to make the big leap, and India is now the third startup ecosystem in the world after the US and China. 

The year 2021 was a watershed year for private equity (PE) and venture capital (VC) investments in India. In 2021, Indian startups raised a record level of funding of $42 billion across 1583 deals, and 42 startups joined the unicorn club. Seed-stage or early-stage funding alone crossed $1 billion in India.

However, going from a disruptive idea to a successful startup is not an easy task - from founders rolling up their sleeves to investors believing in their mission - it’s a journey of will and willpower. 

In the initial stage of a startup, the backing of a VC can prove to be a make or break point for many startups. And, seed-stage or early-stage funding is generally when venture capital financing often begins. At this stage, capital inflow will help entrepreneurs with market research, product development and business expansion – the foundation of any successful business venture. 

In today’s listicle, YourStory has curated a list of venture capital firms that are enabling new-age startups to grow and scale with early-stage and seed round investments.

YourNest Venture Capital

YourNest Venture Capital, based in Gurugram, is an early-stage fund focused on deep-tech domains such as IoT, AI, Robotics, Digital Products, Edge Cloud, AR/MR/VE, Dev. Tools, and enterprise segments.

It provides a safe startup ecosystem where early-stage startups are nurtured and provided the required skills to scale-up and grow.

The firm aims to create an opportunity for Indian founders to scale into global markets with IP-led innovation. They also support founders with ‘Nurture Capital’ with an established network of professionals, advisors, mentors, innovators, and business leaders, and also offer an enabling eco-system for any startup whose business is validated by customers.

Blume Ventures

Founded in 2010 by Karthik Reddy and Sanjay Nath, Mumbai-based Blume Ventures is an early-stage VC firm that funds startups that are solving hard problems.

Blume Ventures partners help founders to achieve product-market fit and power past the first point of scale. The startup seeks to invest in financial services, information technology, manufacturing, blockchain, cybersecurity, ecommerce, b2b payment, gaming, TMT, mobile commerce, cannabis, business services, business products, consumer services, and technology-based sectors in India.

They invest in startups with a strong tech spine, such as businesses backed by intellectual property or code. It has a special learning for B2B businesses and ventures that are capital light. Some of the startups they have invested in are Cashify, Unacademy, Exotel, LBB Purplle, Locus, among others.

They invest for the long run, staying invested for anywhere from eight to 10 years, and as long as the founders are equally invested in the ambition of the business.

3one4

Founded in 2016 by Pranav Pai and Siddarth Pai, Bengaluru-based 3one4 Capital is an early-stage venture capital fund. The firm works in selected market categories, and it focuses on areas such as machine-driven actionable intelligence services for edtech, SaaS, consumer products and services, enterprise automation, fintech, entertainment, and health.

Its deep involvement strategy fund works with founding teams and subject-matter experts to prioritise and strategies for product-market fit, and optimise for defensibility and growth in revenue and impact.

It focuses on margins and on delivering uncompromised end-user experiences. The fund aims to detect new growth opportunities, reduce risk, and return rewarding outcomes to all the stakeholders involved.

The firm's investment includes Faircent, Licious, Tonetag, Tracxn, Darwinbox, Betterplace, Bugworks, and Tripoto.

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Aavishkaar Venture Capital

Founded in 2001 by Vineet Rai, Mumbai-based Aavishkaar Venture Capital provides micro-equity funding and operational and strategic support, and is also known for its impact investing thesis, which can create significant value for both investors and society.

It follows a multi-stage ‘sow-and-reap’ investment strategy that supports businesses across the growth spectrum, from seed to scale stage, while building a portfolio with a balanced risk return profile.

The venture capital firms focus on sectors including agritech, agriculture, financial inclusion, and essential services such as education, logistics, and healthcare.

It has invested in portfolios such as AgroStar, Milk Mantra, Chqbook, Soulfull, and PayWell, among others.

India Quotient

Founded in 2012 by Anand Lunia and Madhukar Singha, Bengaluru-based India Quotient is an early-stage venture capital fund. It believes the drive towards digitization, where businesses increasingly rely on technology or software to run operations, will become mainstream,

The venture capital firm has invested in sectors such as travel, fashion, consumer finance, food, education, and mobile and startups like Roposo, Grabhouse, PrettySecrets, FRSH, and DogSpot.

It has invested in a couple of agriculture-related startups, such as Bharat Agri and Lean Agri.

They invest at a paper stage to enable entrepreneurs to skip the angel round.