Hyderabad-based VC firm Pavestone marks final close of Rs 816 crore fund

Pavestone, a Hyderabad-based venture capital firm, recently finalized the close of its Pavestone Technology Fund at a total corpus of Rs 816 crore, exceeding its original target of Rs 600 crore.

The firm initially increased its goal to Rs 900 crore using the greenshoe option twice to meet strong investor demand.

Focus on enterprise and frontier technologies

Through this fund, Pavestone aims to support early-stage growth in approximately 14 to 15 business-to-business (B2B) technology startups, primarily in India.

The average investment in each startup is expected to range between $5 million and $10 million. Pavestone is prioritizing startup with substantial market traction and established relationships with significant private and public enterprise clients.

The fund's strategy emphasizes sectors like generative artificial intelligence, cloud computing, immersive technology, and bioengineering, with about 80% of funds dedicated to solving large-scale B2B challenges.

“The fundamental thesis of the fund is focused on enterprise technology that addresses public enterprise needs in the B2B space,” said V. Laxmikanth, managing partner at Pavestone.

The remaining 20% of the capital will be directed toward “moonshot” projects involving high-risk, high-impact frontier technologies, according to Laxmikanth.

Early investments and industry impact

So far, Pavestone has made early investments in five startups: E42, a no-code artificial intelligence platform; Bellatrix Aerospace, an in-space propulsion startup; LivNSense, an industrial AI platform focused on decarbonization; NewSpace Research & Technologies, a defense-focused aerospace company; and Cynlr, which develops visual robotics technology.

These companies align with Pavestone's strategy to invest in innovative firms capable of impacting large markets with advanced technological solutions.

"We are committed to timeless investment principles such as rigorous analysis, risk management, and governance," Laxmikanth said, emphasizing the long-term view Pavestone takes in a rapidly evolving market.