Axilor opens a second $100 million fund

7 Jul 2022 , 10:22 AM

Axilor Ventures, a seed-stage investor, is launching Axilor Technology Fund – II (ATF-II), its second technology fund, worth $100 million, to increase its investments in Indian entrepreneurs while maintaining its focus on seed possibilities.

ATF-II anticipates closing by the end of September and is seeking permission from the Securities and Exchange Board of India (Sebi).
This occurs as the eight-year-old fund, which was created by former Infosys cofounders Kris Gopalakrishnan and SD Shibulal, as well as
other top technologists have invested in almost 54 companies, supporting 90% of its initial fund (ATF-I), worth Rs200 crore.

The launch of Axilor’s new fund coincides with a decline in overall startup funding in India, which fell to $6.9 billion from $11 billion in the April to June period. Further, the investments and values of technology companies continue to suffer from the effects of the global macroeconomic downturn.

Early-stage investments have emerged as the sweet spot, as top-tier Indian venture capital (VC) companies rush to back entrepreneurs early. However, as late-stage investors take a cautious approach to investments and growth-stage funds continue to park capital for their existing portfolio.

Despite a little decline to $839 million from April to June, funding for early-stage firms is still 30% greater than the same time in 2021.
Axilor’s most recent corpus is nearly four times greater than its previous closing as the seed investor seeks to keep supporting businesses in the fintech, healthcare, agritech, and enterprise software-as-a-service (SaaS) and supply-chain technology sectors.

It intends to use a significant portion of the most recent money to support companies that develop business-to-business (B2B) software for the Indian and international markets.

However, the fund will keep up its pace of investing in 10 to 12 firms a year, writing initial seed cheques between $750,000 and $1 million, and acquiring an average 10 to 12% share. It will also aim to write follow-up checks totalling $2—3 million based on performance.

Axilor’s second technology fund is expected to support between 100 and 125 new businesses.

The restaurant management platform UrbanPiper, which recently received backing from Indian food tech giants Swiggy and Zomato, the digital entertainment startup PocketAces, the fintech Enkash and Vyapar, and the breast cancer screening tool Niramai are all currently included in Axilor’s first fund portfolio.

Recently, the cap on investments at the seed stage has also been raised by other VCs.

Tiger Global has begun supporting India’s early-stage entrepreneurs, and Sequoia has increased the cap on its accelerator program Surge to $3 million. Tiger Global launched its massive $2.85 billion India and Southeast Asia fund in June.