TLDR:
- Aviral Bhatnagar has launched a Rs 100 crore fund under AJVC to back early-stage Indian startups.
- The emergence of micro VC funds, like AJVC, is reshaping the venture landscape in India as larger VCs shift towards safer investments.
Aviral Bhatnagar, founder of AJVC, has introduced a Rs 100 crore fund to support early-stage Indian startups, focusing on pre-seed stage investments. The fund, launched by AJVC, aims to invest in over 30 startups in the next three to four years. This move comes at a time when new domestic funds and micro VCs are on the rise in India, offering smaller checks to startups at very early stages.
Micro VC firms like AJVC, Better Capital, Java Capital, and Sauce VC are adding diversity to the risk capital investing ecosystem in Indian startups. These firms provide opportunities to take riskier bets as larger VCs opt for safer investments. AJVC, set up by Bhatnagar after the success of A Junior VC platform, is focused on pre-seed investments exclusively, but does not rule out follow-on investments if startups succeed.
The Indian Venture and Alternate Capital Association (IVCA) has acknowledged the growth of micro VCs as a focus area, with plans to empower first-time fund managers with key strategies. AJVC has raised capital from family offices, high-net-worth individuals, and founders of large Indian startups. The VC firm, approved by SEBI as a category II alternative fund, aims to invest in over 30 startups in the next few years, with a potential for follow-on investments in successful ventures.
Bhatnagar sees a larger opportunity for Indian startups amid positive signs from M&As and IPOs. With changes in long-term capital gains tax and removal of angel tax, startups are becoming more attractive as assets. The VC landscape in India is evolving, with micro VCs playing a significant role in supporting early-stage ventures and diversifying risk capital investments.
