VC firm gradCapital launches $6M fund to invest $40K into students-founded startups

BITS/ IIMA alums-founded VC firm gradCapital today announced the launch of its second fund worth $6 million to invest in student-founded startups.

GradCapital will invest $40,000 in student startups for 4% equity. Funded students join a 4-week cohort in Bangalore and engage with accomplished entrepreneurs like Tarun Mehta (Ather Energy), Shashank (Razorpay) and Kailash Nadh (Zerodha), the firm said. 

Most companies raise their next round after the gc cohort, with follow-on investors like Lightspeed and Rainmatter Capital. The firm said it receives around 3,000 applications annually and funds approximately 20 startups per year.

Abhishek, Co-founder & CEO of gradCapital, said, “We are not in the business of finding and investing in deals; we are in the business of letting students be more ambitious and build a future despite having a challenging education system. Being a student also has an unfair advantage: building with friends, not being scared of thinking big, and being scrappy/ fast with their project. How many experienced people can do that? It’s a systemic failure when ambitious students aren’t able to take off while in college, and they end up taking a job because of a loan and become too rational. After which, they are more likely to start a D2C company instead of a quantum computer, and we need more of the latter.”

gradCapital funds teams who have started companies from technical projects, especially in science and engineering. The VC firm recently launched Atomic Fellowship to provide $5,000 grants to students with promising technical projects that can become companies.

It was founded in 2021 by two IIMA friends to help startups get into YC. Zepto was part of their first cohort of 5 teams. gradCapital then raised a $1M fund which they deployed into 18 companies, now valued at ~2x within 18 months.

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