Two young investors launch new VC fund for deep tech startups

Vishesh Rajaram (left) and Arjun Rao. Photo credit: Speciale Invest.

Vishesh Rajaram used to be a principal investor at VC firm Ventureast, working with its sixth fund of US$100 million. He quit the role six months ago to start a new fund with his college mate, Arjun Rao, who worked with Yahoo! and Ibibo before co-founding Travelyaari.

Today, the duo announced the launch of Speciale Invest, their US$20 million fund for young deep tech startups. The firm will be based in Bangalore and Chennai. “We just completed our first close of the fund – about half of our target,” Rajaram told Tech in Asia without revealing the exact figure. They expect to clinch the final close of the fund in the coming six months.

AI for enterprises, electric vehicles, virtual and augmented reality, and enterprise blockchain solutions are some of the deep tech sectors these investors are eyeing.

“We see disruption in the ecosystem on account of radical computational power, unprecedented advances in deep neural networks, significant improvement in (lithium) battery efficiencies, endless data mining, stronger layers of cryptography, maturity of machine vision, and so on,” Rajaram said.

“A lot of our focus is going to be on funding enterprise software companies,” he added. The typical deal size for Speciale Invest will be between US$500,000 and US$1 million, according to him.

Rajaram and Rao have personally done about half a dozen investments so far. These include green bike maker Ultraviolette Automotive, hardware startup Kooki, and practice management software for doctors CareCircle.

“We like to partner with founders who have deep insights on how innovation will change behavior – both for businesses and consumers – and are building products that enable this change,” Rao said in a press statement.

Their plan is to invest in 16 to 18 seed-stage companies in the next three to four years.

See: Ecommerce loses allure, investors kickoff hunt to find and fund deep tech startups

Deep tech is the next big thing that investors in India are chasing.

“2016 was a big year for deep tech. Globally, over US$5 billion venture capital investment went into it,” Sanat Rao, in charge of the seed investment program of IDG Ventures – Frontier Tech Innovators Program – told Tech in Asia recently.

IDG, which invested in India’s ecommerce leaders like Flipkart, Myntra, and Yatra, has already backed deep tech startups such as Active.ai, Sigtuple, Hansel.io, Infisecure, Forus, Perfint, Axio, and Iviz.

Meanwhile, Speciale Invest has already made a couple of investments, Rajaram said without disclosing details.