Artha India Ventures Marks First Close Of INR 500 Cr Second Fund At INR 250 Cr

Artha India Ventures (AIV), the family office of Ashok Kumar Damani, has announced the first close of its INR 500 Cr ($56 Mn) Artha Venture Fund II (AVF II) at INR 250 Cr ($30 Mn). The fund has an additional INR 100 Cr green-shoe option.

Through the new fund, Artha aims to invest in 36 seed-stage startups focused on premium consumption, fintech infrastructure, applied AI, and deeptech, following its 1–2–4 investment model for follow-ons.

For context, AIV follows a”1–2–4″ investment model for follow-ons, designed to provide escalating support to its most promising portfolio companies across multiple funding rounds.

Under this approach, AIV makes an initial seed-stage investment of INR 1 Cr, followed by INR 2 Cr in Series A and INR 4 Cr in Series B rounds. This strategy allows the firm to maintain meaningful ownership in high-potential startups while providing sustained capital.

Following this investment thesis, the fund aims to secure 15–20% ownership in its top portfolio companies and will follow a four-year deployment cycle.

For AVF II, it plans on raising 80% capital from domestic investors and 20% from global investors. Important to note that 90% of the first-close commitments came from Indian LPs, including family offices, and startup founders. The remaining 10% commitments came from international investors.

“AVF II is launching at a time when the startup ecosystem is undergoing a reset. In the last 8 months, barring one, India has recorded fewer than 100 seed investments per month, the lowest in nearly a decade…That tells you how capital-starved the early-stage investment ecosystem has become,” the VC firm’s managing partner Anirudh A. Damani said.

Founded in 2012 by Ashok Kumar Damani, Artha operates as a SEBI-registered micro VC firm that has invested in 140 startups since inception. Its portfolio counts investments in companies such as OYO, Rapido, Purplle, Everest Fleet, Agnikul Cosmos, and InstaAstro.

Earlier this year, AIV also marked the final close of its follow-on fund, Artha Select Fund, at INR 432 Cr, exceeding its original target of INR 330 Cr by 31%.

The investment vehicle will back the top 15% of Artha’s existing portfolio companies across funds. Over the next four years, AIV plans to invest INR 20 Cr each in 12–14 portfolio startups at the Series B and C funding stages via the follow-on fund.

The firm’s capital raise for its latest fund comes at a time when more investors are on the lookout for suitable startup investments. Investors have launched funds worth over $9 Bn, surpassing the $8.7 Bn number of 2024, as per to Inc42’s Indian Tech Startup Funding Report Q3 2025.

In this, a bulk of investor interest is moving toward early stage startups, while late stage primary investments have remained relatively subdued, indicating a focus on younger companies with high long-term growth potential.

Supporting this trend, 58% of the 80 investors surveyed by Inc42 for ‘Indian Startup Investor Survey, Q3 2025’ said they feel more optimistic about early stage ventures. Most respondents said they expect early stage startups to outperform other segments in 2026.

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