US-based 2am VC targets India’s Gen Z with new $25m fund

Over the past few years, India has minted more unicorns compared to Southeast Asia. That may be why US-based VCs Bessemer Venture Partners and Accel are doubling down on the market with two new India-only funds.

2am VC, a Los Angeles-headquartered firm that invests only in India, has also launched a US$25 million second fund, co-founders Hershel Mehta and Brendan Rogers tell Tech in Asia in an exclusive interview.

2am VC co-founders Hershel Mehta (left) and Brendan Rogers / Photo credit: 2am VC

Set to close by July, the new fund plans to invest in up to 30 Indian startups at the pre-seed to seed stages. Its average ticket size ranges from US$500,000 to US$1 million.

Apart from Mehta Ventures, the co-founder’s family office, limited partners include tech executives from companies like Apple, DoorDash, and Meta, as well as other Silicon Valley-based investors.

“We are the eyes and ears for Silicon Valley to get access to early-stage India,” says Rogers, who also co-founded Wag, an on-demand dog-walking platform in the US.

While India is a vast market, 2am VC is targeting a particular segment of consumers: Generation Z.

Betting on young India

Through its US$10 million Fund I, the firm had backed 49 companies including fast-fashion startup NewMe and online retail platform Apna Mart. Both companies have gone on to raise larger rounds: NewMe bagged US$14 million in 2024 while Apna Mart secured US$25 million this week.

Fund II focuses on the same sectors – food, fashion, gaming, finance, and upskilling – while exploring AI opportunities. About 60% of the second fund will be committed to new investments while the rest will be follow-on rounds.

But one important target for Fund II is startups creating solutions for young India, especially Gen Z consumers.

2am VC is looking for entrepreneurs “with a vision that may seem unconventional today but will define the norm in five or 10 years.” One example is quick commerce giant Zepto, which counts Mehta Ventures as an early backer.

See also: New VC firm focused on Southeast Asia and India launches with $50m fund

Mehta explains that Zepto is not just about providing a 10-minute delivery service. Instead, it is addressing a real pain point for Indian urban consumers: the effort and time it takes to step out of one’s home.

“The problem may seem obvious, but the solution isn’t – and that’s what excites us as investors,” says Mehta. He adds that he will “never exit” Zepto, which is eyeing an up to US$1 billion public listing.

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