Indian venture capital firm Arkam Ventures has launched its Fund II with a target size of $180 million to tap “Middle India” opportunity.
With Fund II, Arkam will continue to build a thesis-driven, concentrated portfolio by going deeper in its existing sectors and, as well as identifying category leaders in promising areas like manufacturing, tech and electric vehicles (EVs), Arkam said in a statement on Tuesday.
Within Middle India digitization, Arkam will also continue to focus on financial services, skilling, food, agriculture, healthcare, mobility, and software as a service (SaaS).
Arkam also expects to deploy more capital and back its strongest founders and companies in follow-on rounds.
The fund will also bolster its portfolio advisory function focused on organizational design, go-to-market (GTM) strategy, and finance and operations.
According to the statement, Arkam’s Fund II will build a portfolio of 20 tech startups.
Top-tier Global institutional investors and family offices will form the limited partners base for Fund II.
It is noted that current Arkam Fund I investors include British International Investment, SIDBI, Evolvence, Quilvest, US Institutional Investors, and large family offices.
“As a team with 20 years of venture investing experience in India, we believe that the defining themes for the next decade will be the untapped Middle India market, rapid scale, and capital efficiency,” said Rahul Chandra, Arkam Managing Director.
According to him, Arkam’s “foundation first” approach helps portfolio companies to create sustainable businesses with the right governance, organizational design and go-to-market strategies.
He noted that six of Arkam’s Fund I investments are already leaders in their respective categories and they are redesigning markets with a tech-based business model and scaling rapidly to serve hundreds of millions of customers.
“We believe the Middle India digitization and SaaS opportunity will lead to the creation of 100 new mega businesses over the next decade,
“Arkam II will participate in this exciting phase of value creation by leveraging its network of high-quality institutional limited partners, seasoned investment team and access to highly driven founders,” he added.
Meanwhile, Arkam Managing Director Bala Srinivasa said that the firm launched Fund I with deep conviction on the Middle India digitization and SaaS opportunity.
“Our limited partners supported us, and it’s been gratifying to see the thesis play out both at the macro level and with Arkam investments,” he said.
According to him, portfolio companies like KreditBee, Smallcase, and Jar have created winning digital products for Middle India by reducing friction to adoption, building trust, and designing small-ticket and high-frequency business models that scale very efficiently.
He noted that the fund’s SaaS companies, like Spotdraft and Signzy, have also successfully expanded their India product innovation to global markets.
“We feel our thesis is a multi-generational opportunity and is in its early stages,
“As we deepen our Middle India and SaaS playbooks, it gives us an edge in identifying amazing companies and new business models and being the venture capital of choice for the best founders targeting this opportunity,” he added.
Started in 2020 by Rahul Chandra and Bala Srinivasa, Arkam is a firm investing in the massive Middle India opportunity.
The fund backs a new generation of founders focused on building tech-led solutions for the next 400 million Indians.
From its $106 million Fund 1, Arkam evaluated Middle India opportunities across financial services, skilling, food, agriculture, mobility, healthcare and SaaS.
Its portfolio currently consists of 16 new-age companies, including fintech firms such as Jar, and Kreditbee, Food/Agritech companies like Jai-Kisan and Jumbotail, Skilling companies like Smartstaff and Cusmat as well as SaaS companies like Spotdraft and Signzy.
Over the past three years, the Arkam portfolio has grown in size and scale while demonstrating the ability to monetize.
The aggregate market value of the Arkam portfolio exceeds $2.5 billion.
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