Cofounders of Java Capital (L to R): Vinod Shankar, Bhargavi V and Karteek Pulapaka
Seed-stage fund Java Capital, which has backed the likes of aerospace manufacturer Agnikul Cosmos and fintech startup BharatX, has launched its first fund with a corpus of Rs 75 crore (about $9 million). The fund includes a greenshoe option of Rs 25 crore.
Java Capital has achieved its first close at Rs 30 crore and expects to conduct a final close in the next six months.
The new fund has already invested in four pre-seed to pre-series A startups and plans to build a portfolio of 15-20 such companies with an average first cheque size of Rs 2 crore. The fund will reserve 50% of its corpus for follow-on investments in top-performing portfolio companies, it said.
Java said it will lead and participate in investments into startups looking to raise pre-seed to pre-series A funding across sectors including deep-tech, software-as-a-service (SaaS), enterprise tech, fintech, and climate and sustainability.
Java Capital was founded in the midst of the pandemic in 2020 by former Kstart executives Vinod Shankar and Karteek Pulapaka, along with Bhargavi V. Kstart is a seed fund initiative led by Vani Kola-led Kalaari Capital.
Java Capital has so far invested in 23 startups such as Agnikul, KukuFM, Better Opinions, Yellow Metal, and The Eplane Company through a syndicated model.
“Our previous investments in portfolio companies was through a syndicated model, through which we deployed $3.6 million. Our strategy now is to invest in 15-20 startups and we believe that $500,000-750,000 is enough for a company to achieve product-market fit at the stage we play in. Hence, we felt comfortable raising Rs 75-100 crore as part of our first fund,” said Vinod Shankar, cofounder & partner, Java Capital.
According to Shankar, the venture investor will also look to raise its ‘opportunity fund’ over the next 24 months to make follow-on investments in its portfolio companies. At present, Java takes a 4-8% equity stake in the companies it invests in at the seed stage.
Java has led rounds in 40% of its portfolio companies. According to the fund, more than 50% of its portfolio has raised follow-on funding in up-rounds. The combined valuation of Java’s portfolio is $385 million, it said in a statement.
“We are in the venture space for the next couple of decades and would like to grow Java Capital as the first port of call for founders looking to start companies.” said Bhargavi V, cofounder and partner, Java Capital.
Even as the funding winter grips the Indian startup ecosystem, several venture capital firms have launched new funds of late, including early-stage investors Axilor Ventures, Pi Ventures and Athera Venture Partners (formerly Inventus India).
Last month, early-stage venture capital fund 8i Ventures announced the first close of its latest $50 million fund at $25 million. Last week, Blume Ventures made the final close of its fourth India-dedicated fund with a corpus of $250 million, its biggest so far and more than twice the size of the previous fund.
Prominent venture investors including Accel, Elevation Capital and Sequoia Capital have also raised record capital to back opportunities in the region.