India’s Artha Venture reaches second close of its debut fund

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Artha Venture, a micro venture capital fund, has made a second close of ₹100 crore for its debut venture capital fund, said a senior executive of the fund.

In July 2018, Artha made the first close of its fund at ₹40 crore. A close of a private equity or venture capital fund is a milestone which allows it to start investing the capital raised, while continuing to raise funds from more investors.

Artha Venture is sponsored by the family offices of Madhusudan Kela, former head of investments at Reliance Capital Ltd, Ashok Kumar Damani and Ramesh Damani, former directors at Bombay Stock Exchange. The fund’s maiden investment was in LenDenClub, a P2P lending company.

“Artha Venture Fund’s hands-on-investment style is a mix of western ethics and Indian pragmatism,” said Anirudh Damani, managing partner, Artha Venture Fund. “We expect to make the final close of ₹200 crore by April 2020,” he added.

The fund aims to invest in three broad themes – consumption (internet, consumer goods, consumer services), consumption enablers (which includes anything that helps or enables consumption such as reputation management platforms, logistics, payment gateways, payment apps, fintech) and the B2B, said Damani.

“We have backed companies under these themes through our family office in the past and the portfolio has done extremely well,” he said.

Damani had previously invested in start-ups through his family office. These start-ups include OYO Rooms, Tala, NowFloats, Exotel, Coutloot, Purplle, BabyChakra, Fynd and Mobilewalla.

“Our LP (limited partner) pool includes business owners of listed companies who have invested through their family offices. We also have a combination of HNI’s from India, the USA and the Gulf and one large domestic financial institution on board,” said Damani.

The fund typically invests ₹1-2 crore as seed investment and reserves another ₹10-15 crore for follow-on investments, maintaining a 1:10 ratio for follow-on investments. The fund plans to keep 65% of its capital for follow-on investments.

So far, the fund has made four investments, committing ₹15 crore.

Last week, Artha announced an investment of Rs1.85 crore in Jadooz Media Solutions Pvt. Ltd, a start-up in the entertainment and edutainment space that is building entertainment zones across India in tier 2 and tier 3 towns and villages. Jadooz operates a chain of entertainment zones comprising a cinema, VR entertainment centers and cafes.

Recently it also invested ₹1.5 crore in, a start-up that runs a kabaddi specific web portal. Kabaddi Adda’s web portal aims to connect the kabaddi ecosystem through an in-depth database of matches, players, federations and related content like fitness and training.

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