Speciale Invest's Fund III closes at Rs 600 crore; eyes investing in 18-20 deeptech startups

Economic Times

a day ago

ETtech (L-R), Vishesh Rajaram, managing partner, Arjun Rao, partner, Speciale Invest Deeptech investment firm Speciale Invest said its Fund III was oversubscribed, closing at Rs 600 crore against a target of Rs 500 crore. The new fund will invest in sovereign tech and globally scalable intellectual property (IP) from India.
The Chennai-based venture capital (VC) firm said it will back 18-20 early-stage deeptech startups in sectors such as artificial intelligence (AI) infrastructure, spacetech, climatetech, quantum systems, advanced manufacturing, and dual-use defence. The initial ticket sizes will range from Rs 7 to Rs 10 crore, with the flexibility to go higher in some cases.
Vishesh Rajaram, managing director at Speciale, said the interest of institutional investors, family offices, and HNIs in the deeptech sector has grown significantly. 'Over 50% of Fund III capital is from repeat Limited Partners (LPs), and we also have new institutions and corporate VCs,' he told ET. Speciale said conviction in India's deeptech opportunity has strengthened. The firm will continue to invest in 'zero to one' startups at the pre-seed level. So far, the VC firm has bet on startups such as Agnikul Cosmos, GalaxEye, ePlane Company, Ultraviolette, CynLr, and QNu Labs. It has also made nine mergers and acquisitions (M&A) exits.'A large learning from our Fund I and II has been that this is the best time to build sovereign-edge technologies in the country and begin serving global needs,' said Speciale's Rajaram. He added that India's geopolitical position also calls for reducing dependence on certain foreign technologies. Out of the Rs 600 crore fund, Rs 300 crore will be reserved for follow-up investments.
Speciale is not the only fund to focus on IP and advanced manufacturing. Last week, Accel announced a significant shift in its theses, eyeing IP-driven startups in sectors like aerospace, electric vehicle (EV) components, and medical devices. The firm, in January, announced an early-stage fund of $650 million, specifically for startups in India and Southeast Asia. In its Fund III, Speciale intends to increase the average ownership in startups. 'In Fund I, we owned about 5% of each company; in Fund II, around 10%; now, with Fund III, we'll target about 15%. The round sizes and company stages stay the same, but we aim for more ownership and a larger follow-on capital reserve of about 50%,' Rajaram said, who earlier was a principal at Ventureast, a $100 million early and growth stage fund.Venture capitalists noted that with startups thinking global first and looking at selling in global markets from day one, the existing timelines may come down by a year. Despite the growing trend, Rajaram reiterated that deeptech will need a long gestation period, and for a 'good exit, one that can return the fund, it will typically take 6-10 years.' Elevate your knowledge and leadership skills at a cost cheaper than your daily tea. As 50% US tariff looms, 6 key steps that can safeguard Indian economy
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