Capital-A, a venture capital firm specializing in deeptech and manufacturing, has successfully secured INR 160 crore (US$19 million) in the first closing of its second fund. This new fund is dedicated to empowering early-stage startups that are innovating within India's industrial landscape. The firm aims to raise a total of INR 300 crore, signaling strong confidence in the sector's growth potential.
Strategic Focus on Deeptech and Manufacturing
The firm will channel investments into critical sectors like aerospace, robotics, clean energy, and industrial hardware. A key objective is to support companies in areas where India currently depends on imports, such as aerospace components. Additionally, Capital-A is betting on emerging trends like the digitization of factory operations for small and medium-sized enterprises.
According to founder and lead investor Ankit Kedia, a significant shift is underway in how both founders and investors approach manufacturing. Startups are now adopting a modular approach, utilizing contract manufacturing and product pilots before scaling operations. This modern strategy, combining strong engineering with software from day one, distinguishes them from traditional industrial players.
Fund Details and Investor Confidence
Capital-A is targeting a base corpus of INR 300 crore (US$36 million) for Fund II, with a greenshoe option to raise an additional INR 100 crore. The initial closing was notably anchored by a strong contingent of domestic investors. This local backing underscores a growing belief in the potential of India's hardware and tangible business sectors.
Prominent backers in this round include Srikar Reddy of Sonata Software, Siddharth Bafna of Lodha, and former Amazon technology director Sekhar Boddu. The investor pool was further strengthened by participation from the Chamaria Group and Steel House Family Office. Other contributors include Avyay Jhunjhunwala, the family office of Vijayalakshmi Agarbathi Works, and the Anand Rathi Group.
Deployment and Portfolio Growth
With capital already being deployed, the firm plans to build a portfolio of 15 to 18 startups from this fund. Capital-A intends to take an active, execution-heavy role with its portfolio companies. This hands-on approach involves working closely with founders to navigate operational challenges and scale their businesses effectively.
The firm has already completed seven investments from its new fund, with three more deals in advanced stages of finalization. Its growing portfolio includes innovative companies such as Manastu Space, Agrileaf, Misochain, and CraftifAI. These investments reflect the firm's commitment to backing founders who are building businesses in the physical world.
The successful first close of Capital-A's second fund marks a significant milestone for India's deeptech and manufacturing startup ecosystem. It reflects a robust investor appetite for businesses creating tangible value and core infrastructure. This strategic capital infusion is poised to accelerate the growth of a new generation of hardware-focused innovators across the country.