India’s We Founder Circle (WFC), a founders-led startup investment platform, on Thursday, launched a fund to invest in early-stage startups in India. The vehicle will have a corpus of Rs 200 crore (over $24 million), and a green shoe option to raise an additional Rs 200 crore.
Separately, the firm has also launched a $30 million angel fund in the GIFT City of Gujarat, with a green shoe option to raise another $30 million. It will have a term of seven years, the firm’s co-founder Gaurav VK Singhvi said in a press meet on Thursday.
While both funds will be sector agnostic, the firm will be cautious about investing in the edtech sector since it is “already very exposed”, said co-founder Neeraj Tyagi in a conversation with the media on Thursday.
Both funds have an average ticket size of Rs2-4 crore.
This year, WFC has made investments worth over Rs 105.7 crore across 52 startups, exceeding its earlier target of investing Rs 100 crore. The portfolio firms added this year are from sectors ranging from fintech and cleantech to agritech.
In the past 23 months since its inception, We Founder Circle has invested in over 70 startups in their early stage and mentored them through various initiatives. The firm is an investor in Zypp, Settl, Vidyakul, Glamyo Health, Geekster, YPay, Kazam, nestroots, Cusmat, Humus, Flatheads, Oben EV, and Zoviane Pets, among other startups.
The launch of the funds come as many small and large investors are shifting to early-stage deals as late-stage deals have turned risky in the face of macroeconomic headwinds.
Early-stage deals kept the India startup story burning bright amid funding winter, according to DealStreetAsia DATA VANTAGE‘s India Deal Review: Q3 2022 report. Pre-seed and seed stage deals drove volumes in Q3 at 139, up 10% from 126 in Q2. These early-stage startups garnered a total of $202.9 million, compared with $279 million in the second quarter.
Funding across pre-seed and seed deals in India increased 90% to touch $596 million across 351 deals in Jan-July 2022, compared with $313 million across 215 deals in the same period last year, according to DATA VANTAGE.
“The year 2021 saw 42 startups turning into unicorns and furnishing handsome results for their early-stage investors. This has lured many HNIs to turn to angel investments; however, the trend is still pretty nascent and requires streamlining alongside the right guidance for founders and investors,” Singhvi said.
Other investors with an eye on early-stage deals include Merak Ventures, which, in August, launched a $100 million fund to invest in 18-20 Indian startups over the next three-four years. In October, Fireside Ventures, an early-stage venture fund that invests in digital-first consumer brands closed its third fund at $225 million (Rs1,830 crore).