Arkam Ventures to raise Rs 700 crore to invest in early-stage tech startups

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Arkam Ventures, a Bengaluru-based venture capital firm, aims to raise Rs 700 crore to invest in early stage technology startups, founders and partners Rahul Chandra and Bala Srinivasa said in a press release on Monday.

The duo has already pulled in commitments from investors totalling Rs 325 crore, and has begun investing in startups. Two investments are closed, and three more in progress.

Arkam aims to back technology entrepreneurs innovating for ‘Middle India’—comprising some 400 million people just below the top of the pyramid. The venture capital (VC) firm will focus on financial services, healthcare, food, agri-tech and mobility, which together account for 70 percent of the wallet share of Middle India, according to the release.

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 The partners believe that the Covid-19 crisis is creating permanent behavioural shifts in consumers and industry, which disruptive startups can exploit to build large businesses with strong economic and social impact.

Among Arkam’s investors are Capria, a US-based global fund of funds; Small Industries Development Bank of India; prominent family offices in the US and India; Binny Bansal, co-founder of Flipkart; Vijay Shekhar Sharma, founder of Paytm; and Rajesh Magow, founder of Makemytrip.

The fund’s advisors include Ravi Venkatesan, former chairman of Bank of Baroda; Vikas Choudhry, President, Reliance Jio; Anand Chandrasekharan, EVP at Five9 and previously director, messenger platform at Facebook; Jeremy Lim, co-founder of AMiLI; Arun Balakrishnan, CEO of Xceedance; Hari TN, head of human resources at Big Basket; and Ameen Haque, founder of Storywallahs.

Chandra and Srinivasa—alumni of BITS Pilani—foresee a big acceleration in digital adoption from Middle Indian consumers. “This shift will forever change the way Indians consume essential products and services,” they say. “Entrepreneurs have an opportunity to build better, faster, safer, and lower cost solutions.”

“India’s recovery from the Covid-19 crisis and a return to sustainable growth will require new ideas, policies and mass market solutions that positively impact the lives of millions of Indians. Arkam’s focus on start-ups building technology-led solutions for Middle India is timely and they bring a strong track record to this effort,” Ravi Venkatesan said in the release.

"The Arkam team brings rich experience in Indian VC investing. Over the past 15 years, they have shepherded many startups from foundational to high growth phases, including IPOs,” Vijay Shekhar Sharma said in the release. “This is invaluable experience for founders as they navigate the inevitable highs and lows of the entrepreneurial journey. Any new startup should look forward to leveraging this learning for sustained success.”

Chandra started his VC career in 1998 with Walden International, investing in Indian and Silicon Valley startups. Before Arkam, he was co-founder and managing director at Helion Ventures, where he backed over a dozen start-ups across three funds and was involved with companies including Equitas (IPO), Spandana (IPO), Shubham Housing, MoEngage, RailYatri, UnitedLex (Acquired), LetsBuy (Acquired), Seclore and Toppr. ​

Srinivasa—who started his career as a Wall Street equity analyst covering the software sector—was a partner at Kalaari Capital, where he backed start-ups in areas such as lending, mobile brokerage, credit scoring, food/grocery and media. Prior to Kalaari, he led sales and marketing at two successful start-ups—Vistaar Technologies and Amba Research.

Srinivasa said, “The next 400 million market is very large, but has huge inefficiencies in the form of broken supply chains, limited access to credit, and outdated brick and mortar infrastructure, all of which was magnified during the Covid-19 crisis. Founders who combine a deep understanding of Middle India and leverage technology to design low-cost solutions and efficient new business models can build highly differentiated and scalable businesses. We seek to partner with such founders and help them build best in class businesses.”

Arkam Ventures has made two investments—in Krazybee and Jumbotail. Krazybee is one of the fastest growing digital lenders in India. The company has scaled to over two million customers, sourced and serviced completely on its mobile app. Jumbotail provides a digital marketplace and supply chain solutions for kirana (mom-and-pop) stores and has grown to service over 20,000 kirana stores in Bangalore.

Arkam is in the process of closing three additional deals in agri and fintech. With its first fund, Arkam will invest in 15 to 18 companies with a focus on Series A and Series B investments, with initial investments in the range of Rs 15 crore to Rs 30 crore.