Artha India Ventures secures first close of Rs 250 crore for micro-VC fund to back Indian startups

Artha India Ventures (AIV), the venture arm of the Artha Group, has announced the first close of its second early-stage micro venture capital fund, Artha Venture Fund II (AVF II), at Rs 250 crore, targeting a total corpus of Rs 500 crore and an additional Rs 100 crore green-shoe option.

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The fund will invest in 36 seed-stage startups operating in premium consumption, fintech infrastructure, applied AI, and deep tech. It plans to deploy initial cheques of about Rs 4 crore, with follow-on investments of Rs 8-16 crore, aiming for 15-20% ownership in its top-performing portfolio companies. AVF II will follow a four-year deployment cycle.

AIV, which manages over Rs 1,500 crore in assets, said 90% of first-close commitments came from Indian limited partners, including family offices and exited founders, while 10% came from overseas investors. Early backers include Shahi Group, DSP Family Office, Narendra Karnawat of Glance Finance, and several founders from Artha’s earlier portfolio.

Founded as the single-family office of Ashok Kumar Damani, AIV has investments across 135 startups and 34 exits, with notable names such as OYO Rooms, Rapido, and Purplle.

The firm currently operates four distinct funds:

• Artha Venture Fund I (Rs 225 crore corpus, closed in 2021), which has backed Agnikul Cosmos, Everest Fleet, LenDenClub, and InstaAstro;

• Artha Select Fund, launched in 2022, which selectively increases exposure to top-performing companies; and

• Artha Continuum Fund, which provides deal-by-deal opportunities primarily to family offices.

Managing partner Anirudh Damani noted that early-stage venture funding in India has seen a sharp slowdown, with fewer than 100 seed investments per month in recent months, the lowest in nearly a decade.

He said the graduation rate from Seed to Series A has dropped from around 12-13% to as low as 5-6%, indicating a capital-constrained environment.

Damani added that the next year will be a period of “recalibration and resetting of valuations”, as funds launched in the liquidity-heavy 2021-23 cycle face challenges in raising follow-on rounds. AVF II, meanwhile, has already warehoused five startups and plans to reach ten portfolio companies by the end of this year, marking its fastest deployment pace yet.

The final close of AVF II is expected by March-June 2026.