Deep tech investor Speciale Invest to focus on Series A and above rounds with new growth fund

Speciale Invest, a VC focused on pre-seed and seed funding, is looking to support its existing portfolio companies through their growth across Series A and above funding rounds

Speciale Invest, a deep tech VC firm whose portfolio includes start-ups such as Agnikul Cosmos, GalaxEye, ePlane, etc on April 5 announced the launch of its Speciale Invest Growth Fund I with a corpus of $24.33 million (Rs 200 crore), and initial investment of more than $12.16 million (Rs 100 crore).

The firm has received approval from SEBI to provide series A and above funding to potential start-ups. However, Speciale Invest, which has traditionally been a pre-seed and seed funding investor in deep tech start-ups, will only go for series-A or above funding for their portfolio companies, Vishesh Rajaram, managing partner of the VC told Moneycontrol.

"We have generally got into companies that have mostly no revenues, building products, figuring out product market fit. As we did this, you know, over a period of time, we will find good companies that are scaling very well, but are raising multiple rounds of financing," Rajaram said.

Also read: GalaxEye Space raises $3.5 million in funding from Speciale Invest, Zerodha's Nithin Kamath, others

"And given the fund size limitations of the funds, at some point in time, we may not have enough to follow on commitments. So the whole idea of doing a growth fund for us is to essentially set aside capital to participate in future rounds of financing for the portfolio," he added.

"What we have unique to us is we've already known the company we participated in the previous rounds, we have insider knowledge and awareness of the company and hence we think we want to put more capital to work on these companies," he explained adding that going forward, the company will be looking to invest in sectors such as biosciences, synthetic biology and so on.

In 2018, Speciale Invest raised its first fund of $7.2 million (Rs 60 crore), which backed 18 companies with an average deal size of $0.5 million and scored five early exits.

On April 6, 2022, the company announced the final close of its second fund at $36 million (Rs 300 crore), with plans to invest in more than 20-22 early-stage companies through pre-seed and seed rounds. The average

cheque size ranged from $500,000 to $1 million.

Rajaram said, "Since we have been investing very early in, exits come in two forms. Firstly, they come in the form of merger and acquisition, and they come within the first five years of the company.

"And secondly, you're typically looking to do go exits with essentially a lot of revenues and traction and profitability. And then large private equity investors may will be willing to buy out. So I think those will essentially be our two windows of exits," he added.

“Our new Growth Fund I is an extension of our vision and commitment to expand our investment strategy to support high-performing technology

startups from our portfolio at the Series A and beyond stages," said Arjun Rao, General Partner at Speciale Invest.