New Delhi, June 15 -- Early-stage venture capital firm Aeravti Ventures is preparing to start raising its second fund after almost fully deploying its maiden investment vehicle, a person aware of its plans told VCCircle.

The Bengaluru-based VC firm filed for regulatory approval last month to launch the new fund and anticipates receiving it within the next 60 days, the person said.

Aeravti may target a corpus of Rs 250-300 crore in the new outing and aims to achieve the first close at Rs 125-150 crore, potentially by August, if it receives approval from the Securities and Exchange Board of India, he said.

The VC firm, led by managing partner Rishabh Singh and partner Shubham Jhuria, launched its maiden fund in late 2022 and marked its first close in mid-2023. While the fund's initial target corpus was Rs 100 crore, the VC firm eventually opted for a smaller size to "maintain discipline" and follow a more "concentrated approach". It made the fund's final close at Rs 76 crore and decided to roll forward unutilised commitments into the second fund, he said.

Aeravti has nearly fully deployed Fund I, with the final cheque expected within a month. It backed seven companies, leading every investment and taking significant minority stakes. It made follow-on investments in three portfolio companies - ONO, Origin Fresh, and East Ocyon Bio. The fund's typical first cheques ranged from Rs 4-6 crore, with follow-ons of Rs 10-15 crore.

The person said the strategy for the new vehicle will mirror the first - a concentrated portfolio with smaller initial cheques followed by larger follow-ons and potential third cheques in high-conviction winners.

The firm's investment focus centres on sectors expected to remain critical over the next decade: food infrastructure (including agritech, agri-finance, and supply chain), health infrastructure (biotech, healthtech, and contract drug manufacturing), and physical infrastructure (technology-led manufacturing, energy, and waste management). It will target underserved areas with deep-tech elements, leveraging India's potential in areas such as China+1 manufacturing strategies.

The first fund's limited partners primarily included family offices, high-net-worth individuals, and entrepreneurs. Many of them are likely to return for the second vehicle. The new fund will also seek institutional capital.

Aeravti also expects initial exits from Fund I within the next 18 months, with the current portfolio showing strong performance. It targets long-term holding periods of 8-10 years for winners while pursuing shorter liquidity events where appropriate, the person said.

Published by HT Digital Content Services with permission from VC Circle.