Funds managed
| Fund name | Asset Class | License |
| Aaruha Technology Fund | VC/ Seed | SEBI AIF Cat 1 |
http://www.edfindia-canbankventure.com/aaruha_technology.php
StartupXseed Ventures LLP is the Investment Manager of “Aaruha Technology Fund”
About the AMC
- Founded in June 2015 by B. V. Naidu along with Mohandas Pai (Aarin Capital), Ramakrishna V, and Ravi Thakur and supported by like-minded team from the Industry, Academia and Professionals.
- B.V. Naidu was senior engineer at ERNET India, Department of Electronics & IT.
- StartupXseed supports budding entrepreneurs both at the Strategic as well as Seed level.
- Fund will focus on High Technology Businesses including Security, Semicon and Embedded Devices.
- In his capacity as Director of Software Technology Parks of India (STPI), he has created effective Techno Economic Ecosystem by actively engaging with the Industry, Government Departments and Academic Institutions. Mr. Naidu has facilitated the growth of the software exports from less than $8 million with 13 companies in 1991 to $12.0 billion from more than 1800 companies in Bangalore by 2007.
- StartupXseed Ventures LLP has on boarded Canbank Venture Capital Fund Limited (CVCFL) for an investment of 20% of the fund size.
Media
Title: This Bangalore Based Seed Funding Firm Supports Entrepreneurs & Startups with Combined Seed Fund, Strategic Support, Market Access, Mentorship & Assures a 3x Value Add, Source: Startup success stories, Date: 26 September 2017
What is StartupXseed Ventures?
Ans: StartupXseed Ventures is an “Asset Management Company” or an “Investment Manager” for the SEBI Registered “Aaruha Technology Fund” which, from the inception, focuses on Deep Technology, B2B opportunities in the areas of Cyber Security, ESDM, Drones, SaaS, Digital IP, Cloud Technologies and AI/ML.
How and when did you get the idea to launch StartupXseed Ventures? What originally motivated you to start it?
Ans: Mr. B V Naidu (Former STPI – Bangalore/Hyderabad Director), who is one of the key architect of the Indian IT Industry, who also helped entrepreneurs even before the period of Startup cultures by establishing the Incubation Center in STPI more than a decade ago. This being the motivation for us, we continued to help the Startup Eco system by creating the fund with a different model of “Co-Founder program”.
What are the goals of StartupXseed Ventures? What is the business model?
Ans: We want to make an impact on the socio-economic ecosystem of the businesses by helping the young generation of startups to innovate and build sustainable businesses. Our goal is to support young entrepreneurs not only with the Seed capital, but also with the wrapper of strategic management services to ensure the churn of successful entrepreneurs, thereby increasing ROI for the Investors.
Could you please detail the services offered by StartupXseed Ventures?
Ans: In essence, StartupXseed is an early stage seed fund supporting the aspiring entrepreneurs with great ideas with Strategic support, Market Access, Mentorship and closely supported by the Investor/advisory board of StartupXseed.
What are the selection criteria for admittance into the Aaruha Technology Fund program? What are the important characteristics you are looking for in the pool of applicants?
Ans: Primarily we look at the following criteria for the selection of the investment;
- Founding Team with complementing skills, passion and perseverance.
- Potential idea, its market opportunity, business model and possibility of building a sustainable business.
- Area where we can add value, influence and support the successful exit.
What are the companies that StartupXseed Ventures is currently supporting?
Ans: We have done Investments in Shield Square, Aarav Unmanned Systems (AUS), and AIBONO formerly known as Air wood, Darwin Box, and Siliconch Systems as of now.
Could you please detail your immediate future plans for the StartupXseed Ventures?
Ans: At StartupXseed we plan to invest into 6 companies in next 6 months. Our intention is to complete the deployment of funds with around 18-20 companies.
How do you reach out to Indian tech entrepreneurs?
Ans: Deal flow is very crucial for the success of any fund and hence StartupXseed works with different organizations like Incubation Centers across India, Angel Networks, VC Networks, own Professional Network, Investment Bankers and our own website.
Has StartupXseed Ventures so far found any private partners?
Ans: StartupXseed differentiates itself with some of its Strategic Partnerships with Incubation Centers, International Innovation Labs in Israel, Taiwan, and Korea and finally with other VC partners for follow on funding. Fantastic.
Do you have any thoughts for the future of Indian Tech Entrepreneurs or other concepts you wish to ignite?
Ans: Young entrepreneurs are smart and understand the nitty-gritties of running the businesses however we feel following are the some of the areas where they should focus;
- While Technology is important, its Business Application must be effective to be successful.
- As the evolution of various Business models is happening rapidly, they decide and adopt the best quickly.
- Take a failure as a step towards a better change, be it in Business or Life.
Title: StartupXseed Ventures LLP to get 20% of fund size from EDF managed by Canbank Venture Capital Fund Limited (CVCFL), Source: Startup success stories, Date: 15 November 2017
StartupXseed Ventures LLP has on boarded Canbank Venture Capital Fund Limited (CVCFL) for an investment of 20% of the fund size. In a step towards creating sustainable Startup ecosystem, this collaboration will help enhance StartupXseed’s plan of reaching out to more & more Entrepreneurs with newer inventions in the technological space which could disrupt the global market, much like their previous investments. StartupXseed Ventures focuses in B2B businesses opportunities to invest in and they have invested in companies like “ShieldSquare”, “Aarav Unmanned Systems”, “AIBono” (formerly Airwood Aerostructures)”, “DarwinBox” and “Siliconch Systems” who have been doing well in their businesses and moved onto raise next round of funding.
Speaking on the collaboration, Mr. B.V. Naidu, Managing Partner, StartupXseed Ventures said, “We are very excited to receive the investment from CVCFL and it will accelerate our investment plans to invest in the areas of Deep Technologies like Nano Electronics, AI/ML, Cyber Security, Semiconductor and IoT.”
Canbank Venture Capital Fund Limited (CVCFL) is India’s first and only Public Sector Bank sponsored venture fund in India and across industries. According to Mr. Baskaran, MD, CVCFL, “Experienced Founding Team, Technology Focus towards the sectors under Electronics Development Fund (EDF) & the network of StartupXseed Ventures makes a great choice for EDF (a 330 M$ FoF) to commit 20% of the fund managed by StartupXseed. The EDF Fund Manager, Canbank VC, (a wholly owned subsidiary of Canara Bank), is excited to be a part of the journey and we believe it will serve the purpose of EDF and Govt. of India to boost entrepreneurs and startup eco-system overall.”
StartupXseed Ventures is planning to invest in few prospects in New and Emerging Technologies like Block chain, Cloud Technologies, AI for different Business Applications and look into possible synergies of current and new investments in the future.
About StartupXseed:
StartupXseed Ventures LLP is the Investment Manager of “Aaruha Technology Fund” registered with Securities and Exchange Board of India (SEBI) as Category I – under Alternative Investment Fund (AIF) Regulations 2012.
StartupXseed is a Strategic programme, for supporting the ambitious entrepreneurs with great ideas, combined with Seed fund, Strategic support, Market Access, Mentorship and closely supported by the Startup Support Council of StartupXseed. It acts as a “Co-Founder/Seed Partner” in helping innovation to succeed in the Technology and Technology enabled areas across sectors in India.
Title: StartupXSeed Ventures looks to invest in AI, AR firms, Source: mnacritique, Date: August 2017
https://mnacritique.mergersindia.com/news/startupxseed-ventures-looks-to-invest-in-ai-ar-firms/
Bengaluru-based deep technology focused venture firm StartupXseed Ventures LLP is looking to invest in emerging firms in artificial intelligence (AI) and augmented reality (AR), focused on building products and solutions for business customers.
The Rs 100-crore Securities and Exchange Board of India (Sebi)-registered fund, founded by technology industry leaders of Bengaluru — T V Mohandas Pai and V Balakrishnan, former directors at Infosys, B V Naidu, former director of Software Technology Parks of India (STPI) — looks out for entrepreneurs who have deep technology-focused skills, but need support infrastructure to scale and grow business.
“We will provide support, other than money till they cross the bridge. Take us as an accelerator programme that we have institutionalized everything under the fund,” said B V Naidu, Managing Partner of StartupXseed Ventures. “Only a few academic accelerators have succeeded, while at the corporate accelerators, you will have a nice environment to create a brand for themselves — none of those executives are passionate enough to support an entrepreneur”. The firm has so far invested in five firms — Aarav Unmanned Systems and Airwood Aerostructures, drone start-ups; ShieldSquare, a security start-up; Siliconch Systems that has developed IP in semiconductor space and Darwinbox HR Technology. “Each of these companies have gone for an up round with multiples of 2.5 to 10 times,” says Naidu, who helped build the STPI in Bengaluru by offering common data services, shared infrastructure, and local support, when the software services sector was blooming in the city. “In a few companies, we have also participated in the next round.”
Increasingly, investors are focusing on backing start-ups that build products and services for business customers, hoping that a small investment, backed with relationships, can get long-term contracts with corporates. This would also help start-ups sustain financially and grow the business, unlike in the consumer space, where start-ups need to throw money to attract users.
The fund, he said, has backing from professionals from the information technology sector with deep domain expertise like Sanjay Nayak, the chief executive officer of Tejas Networks, to help telecommunication firms, or S Janakiraman, co-founder of MindTree to share his expertise in embedded systems.
“Most of our mentors are also investors in the fund. There is a tight coupling so that they show extra interest in the success of the start-up. It is not just money alone,” says Naidu.
The firm also has set up a team that supports in accounts, infrastructure and governance standards, which help the entrepreneurs to focus on building technology products and services.
StartupXseed has also tied up with the International Institute of Information Technology-Bangalore’s incubator and Blue Sky Angels, an initiative of eHealth Technology Business Incubator that has support from the department of science and technology.
Title: Moneyball: BV Naidu on Why StartupXseed Targets Low Investment Size and Prefers Faster Exits, Source: dailyhunt, Date: 07 May
Managing partner Naidu said the fund is in the final stage of closing investment in 3 startups. StartupXseed is now considering raising a second fund
The VC fund recently announced its exit from two startups with 3x to 5x returns
The typical mantra of venture capital funds investing in India has been to – move fast, diversify risks across a range of investments and hope some of them blow up, balancing out the risk in others, with some hopefully delivering worthy returns.
This seems to be the simple mantra followed by the global VC industry, but in the Indian context, the concept has a few limitations.
For starters, the number of startups that have truly exploded is still few in number. For India, which is the third largest startup ecosystem in the world and with the second largest population on the planet, there are just 28 unicorns. One of the biggest stumbling blocks for the Indian startup industry is the fact that it does not have a great track record of investor exits. In fact, the biggest investor exit story happened only last year when Walmart bought a majority stake in Flipkart.
In a nutshell, the risk for investors in the Indian market is more and the opportunity to exit is less.
However, this hasn’t stopped India from becoming one of the most lucrative markets in the world right now simply thanks to the right demographic, rising per-capita and disposable income levels, and burgeoning internet penetration. But as many VCs and investors are realizing, this opportunity comes at the cost of staying vested in the ecosystem for several years.
Unlike counterparts who have chosen the longer exit route, BV Naidu, managing partner at venture fund StartupXseed Ventures, has gone for the opposite.
Founded in 2015, StartupXseed Ventures, which invests in deeptech startups in the B2B space at the seed stage, has invested in a total of 8 startups and has not raised a second fund since its first fund whose final close was at a modest $7.2 Mn (INR 50 Cr).
More importantly, StartupXseed Ventures has already made two successful undisclosed exits and with a good return to boot, that ranged between 3x to 5x. The exits were in a Bengaluru-based bot management solutions provider and a semiconductor company, where the fund had earlier led the seed rounds.
What puts StartupXseed’s approach in stark contrast with the other players is its strict adherence to a short term exit strategy. Its investment in startups lasts between 2 and 5 years with 3 years being the sweet spot. This is half the duration of the usual 5-6 year exit roadmap taken by many other venture funds.
The reason for this formula is very simple, according to Naidu. “We are a little more cautious and conservative than most funds especially because we are first-time fund managers and through my past experience I have been nurturing entrepreneurs for 30 years,” Naidu told Inc42.
Naidu says by taking it slow, the fund has been able to understand the space well, and the two exits are not only evidence of that but also will help it establish its own differentiated offering.
The need of mentorship will continue, the entrepreneurial pyramid has different classes, the top 15% don’t need mentors but as you get towards the lower levels of the pyramid entrepreneurs need support and the ticket sizes we invest in – Naidu
StartupXseed typically invests in the INR 3 Cr ($432K) – INR 5 Cr ($720K) range, against 5% to 12% stake in the startup.
Some of its previous investments include semiconductor company Siliconch Systems, Chip-design testing startup Singularity Dynamics, predictive analytics startup AIBono, drone delivery startup Aarav Unmanned Systems and HR SaaS provider darwinbox.
Inc42: Looking back, what have been your key takeaways from the last 5 years?
BV Naidu: We are one of the foremost institutional seed investors in the deeptech space. When we started, we began with very small fund size and as we moved on, the industry matured and other funds also came in and we had to increase our ticket size but we were confident about the space we were operating in.
Many people were skeptical about the deep tech seed investment space and we took that as a challenge and started this fund and brought in this concept of a cofounder program where we give entrepreneurs enough and more of our time and are very hands on to assist them.
We don’t call these meetings as a review because we feel part of the company.
Inc42: Which areas are you looking at for future investments?
BV Naidu: We have done a total of eight investments, out of which we have had two exits. We are going to announce another three investments soon which have already been approved by the investment committee and on which the due diligence is going on.
One startup is engaged in the space of robotics dealing with warehouse automation, the other one is in space technology and the third is in health tech.
Inc42: You mentioned the market has matured over the last few years. Where do you see this maturity?
BV Naidu: The quality of entrepreneurs has increased and the expectation in terms of the valuation has also increased (among startups), thereby more investment is needed. That’s why we had to increase our ticket size to INR 3 Cr ($432K) to INR 5 Cr ($720K), from the earlier range of INR 1 Cr ($144K) to INR 3 Cr ($720K).
Talking about exits, the broad horizon we look at is more than two years but before five years. Ideally, we look at 3 years to be the time which will be the best opportunity for us to exit from any investments.
Inc42: Although you did raise the ticket size to match what was happening around you, you also raised the bar for shortlisting. Why is that so?
BV Naidu: In our journey, we have seen 850 companies; 220 of these went to the technical committee, and out of that 20 have gone to the investment committee. Out of the 20, 11 were finally approved for investments.
When you look at the maturity of the company and the number of deals that have come to the table, we have seen a further reduction in our shortlist at the first stage. Our evaluation process is extensive and the number of startups that the technical committee reviews has come down significantly.
We usually keep 20-30% of the amount we invest for follow-on investment in our portfolio companies and even in that; we have done follow-on investment only for two startups.
Inc42: You could be outspent by your peers; aren’t you worried?
BV Naidu: I guess we know what our positioning is and what we need to do. We know our space well; the big ones will continue to be there. These two exits will help us establish our brand and the need for mentorship will continue.
The entrepreneurial pyramid has different classes, the top 15% don’t need us and we don’t need them. The lower sections of the pyramid need support and fit the ticket size we are investing in.
Our first fund was about $7.2 Mn (INR 50 Cr) first fund and we are exploring a second fund since we are getting interest from investors.
Inc42: B2B market in India isn’t considered to be as lucrative as the international markets. Do you agree and why do you think that is??
BV Naidu: Both the companies that we recently exited did not have any of their customers in India. We are seeing the same thing happening with our other portfolio companies. I think the lack of scale is to do with corporates not spending enough money. They like SaaS products but apart from that, they aren’t spending enough money on innovative tech solutions. They are not comfortable doing one-time payments and prefer pay as you go deals (which is a big challenge).
Title: GVFL makes Series a funding in defence tech startup, Optimized Electrotech, Source: EconomicTimes, Date: 22 February 2019
GVFL Ltd, a venture capital firm, has invested an undisclosed sum for a Series An investment round in Optimized Electrotech Pvt. Ltd., a high-end technology startup with state of art electro-optics surveillance systems having defense and commercial applications.
The startup is headquartered at Ahmedabad with a prototype development centre at Bangalore. It has recently signed a MoU with the Government of Gujarat during Vibrant Gujarat 2019 to setup manufacturing facility in the state. This is GVFL’s fifth investment from its Startup Fund.
It builds indigenous designed products, developed and manufactured surveillance systems and provides breakthrough technology innovation solutions for various applications such as electro-optics, camera, electronic hardware, optoelectronics, and critical asset tracking for military & defence as well as for airport surveillance.
It builds indigenous designed products, developed and manufactured surveillance systems and provides breakthrough technology innovation solutions for various applications such as electro-optics, camera, electronic hardware, optoelectronics, critical asset tracking for military & defence as well as for airport surveillance.
Optimized Electrotech is led by Sandeep Shah, an IIM Calcutta alumnus and co-founded by team members from IISc Bangalore, ISI Kolkata and IIT Delhi. Each of them carries experience from reputed government and multinational organizations in the fields of electronics, optics and imaging software.
“India’s need for intelligence, surveillance and reconnaissance is more than ever before. Strengthening “Make in India” initiative, Optimized intends to save hundreds of millions of foreign exchange by bringing down the import substitution to various products. It is expected to serve Paramilitary forces, Defense, Aerospace, Airports and Critical assets and other industries apart from a huge Export market” said Sanjay Randhar, managing director, GVFL.
Title: StartupXseed launches Aaruha Technology Fund, Source: privateequitywire, Date: 04 September 2015
https://www.privateequitywire.co.uk/2015/09/04/229610/startupxseed-launches-aaruha-technology-fund
The article is about launch of fund by the firm.
Title: eBihar 2014 – Inaugural – Shri B V Naidu, Source: YouTube, Date: 10 March 2014
The event was about his previous work. Money spent on different e-governance applications, one can surely say that Bihar is IT savvy and now, looking for investments in IT sector. Bihar has created the `25-crore Angel Fund, which no other state in the country has.
Analyst questions
- Can you briefly explain your investment philosophy?
You must be logged in to post a comment.