Bengaluru-based early-stage enterprise capital (VC) agency Seafund Enterprise Capital is now turning its scale larger and deeper by putting bets on startups which have know-how depth, and is backing them with bigger cheques.
Based in 2015 by Manoj Kumar Agarwal and Mayuresh Raut, Seafund got here out with its first fund of Rs 25 crore round 2018, and is now seeking to shut its second fund of Rs 250 crore by the tip of this yr.
A sector-agnostic B2B targeted fund, Seafund usually invests in startups which have a tech play of their enterprise with a transparent enterprise mannequin.
In a dialog with YourStory, Manoj Kumar Agarwal, Co-founder and Managing Associate at Seafund, says, “We clearly noticed loads of concepts, however there was a scarcity of enterprise understanding, and we needed to assist these entrepreneurs.”
Each Agarwal and Raut are seasoned professionals and have labored at giant companies and have been entrepreneurs earlier than. They had been observing the modifications within the Indian startup ecosystem and determined to again startups at their early stage.
“We needed to again these startups which ship worth and have a scalable enterprise mannequin,” says Agarwal.
The beginning
One of many first investments made by Seafund was in , a tech startup that targeted on buyer engagement and retention. Seafund exited this startup after it was acquired by Shiprocket in 2022.
From the primary fund, the VC agency invested in round 14 startups, which incorporates the likes of , , , , and many others. Seafund’s expertise proved to be useful for these startups to pivot into areas which had a powerful enterprise case.
For instance, one of many fintech startups in its portfolio began offering inventory market buying and selling advisories to retail shoppers, however quickly realised it was gaining the numbers however there was no income coming in as these customers weren’t prepared to pay. It then pivoted to offering its providers to giant companies, which ensured there was a gentle income.
Graphic by Nihar Apte
In keeping with Agarwal, Seafund noticed a web inside fee of return of 40% as of March final yr.
“Our corporations are doing properly and we do not need any write off, however on the identical time we do not need a unicorn,” he remarks.
A few of Seafund’s portfolio startups have raised follow-on funding rounds–Genrobotics has raised capital from and has acquired capital from Haldiram Merchandise.
On this journey of investing by means of the primary fund, Seafund had a couple of learnings the place it realised that it wants to offer larger cheques to startups and likewise sharpen its sector focus.
Pivot
Seafund’s Rs 250 crore (round $30 million) Fund II is a break up between Rs 200 crore major cash and one other Rs 50 crore greenshoe choice.
Whereas it used to take a position round $100K as preliminary capital in startups, after which with follow-on rounds within the first fund, it now plans to take a position round $0.5 million within the first spherical of funding and comply with it up with greater than $1 million in subsequent rounds within the second fund.
In keeping with Agarwal, the bigger second fund will permit it to again entrepreneurs for an extended time frame, in addition to having an even bigger stake in such corporations.
Seafund additionally noticed a deeper know-how change within the Indian startup ecosystem the place new startups had been rising in areas like semiconductor, climatetech, {hardware}, and mobility. In brief, it plans to spend money on the deeptech area.
“There are a lot of companies which have been based by mature entrepreneurs and there’s a have to assist them longer, offered they’re heading in the right direction,” says Agarwal.
Seafund has already carried out 5 offers from the second fund, which incorporates startups corresponding to , a deeptech startup targeted on port logistics; drone startup Redwing; and Simactricals, which offers wi-fi chargers for electrical autos.
Agarwal says it plans to construct out its portfolio for the second fund by subsequent yr.
Seafund sees varied proposals from deeptech startups, which seem to be formidable concepts. There’s a startup which is seeking to develop a multi-fuel automobile engine, which might robotically swap to completely different sorts of gasoline be it gasoline, hydrogen, or electrical battery. One other startup is creating a cloth just like teflon, which can be utilized for area functions.
Nevertheless, Agarwal is kind of clear that Seafund will focus solely on these startups that can make progress by way of their merchandise or options, and likewise present sure income visibility.
The Indian startup ecosystem has a lot of early-stage enterprise capital companies and it turns into a difficult job to get a powerful foothold. Agarwal believes their community helps them with deal movement, and their understanding of know-how and enterprise creates a stronger bond with its portfolio of corporations.
(The article has been up to date to make a correction within the graphic)