New Delhi, June 30 -- Early-stage investment platform GSF is making a fresh attempt to institutionalise its venture investing business, more than a decade after it began backing startups through its accelerator and angel network, as improving exit visibility and a maturing startup ecosystem revive interest in domestic venture capital funds, VCCircle has learned.

The firm is raising a Rs 150 crore (around $15.8 million) Category II alternative investment fund with a greenshoe option of Rs 50 crore, with fundraising currently underway, Nirmal Shah, partner at GSF, told VCCircle. "The first close will take place once the fund secures the minimum capital commitments."

The proposed vehicle marks GSF's second attempt at launching a domestic fund. In 2015, the firm had registered a Category I alternative investment fund with the Securities and Exchange Board of India (SEBI), but the vehicle never achieved a first close nor did it launch an investment scheme. The registration was eventually cancelled after the proposed fund remained inactive.

According to Shah, the environment for venture investing has changed materially since then.

"The Indian startup ecosystem has matured significantly, shifting from a growth-at-all-costs mindset to a focus on sustainable metrics and deep liquidity. Exit visibility has improved, and the AIF registration process has become more efficient. This makes it the ideal time to institutionalise what has historically been an accelerator and angel syndicate," he said.

Beginnings as a syndicate

Founded by entrepreneur and angel investor Rajesh Sawhney, GSF has spent the past 14 years investing in startups through its accelerator and angel syndicate, backing more than 150 companies. The new fund is aimed at formalising that investing platform with a dedicated institutional vehicle.

"We view this fund as Chapter 3 of our story," Shah said. "Our history as an accelerator and angel network serves as a significant competitive advantage and sourcing moat. The institutional fund formalises the capital stack around a platform that already possesses deep expertise in sourcing, diligence and founder support."

The fund will primarily invest in pre-seed and seed-stage startups across enterprise AI, consumer technology, fintech and deeptech. GSF plans to invest between Rs 1 crore and Rs 8 crore (around $110,000 and $840,000) in each startup and build a concentrated portfolio of about 12-15 companies, while reserving capital for selective follow-on investments.

Shah said the firm's experience of investing in more than 150 startups has shaped a disciplined investment philosophy centred on founder quality and resilience, valuation discipline and sector selection.

The firm sees some of the biggest opportunities emerging in enterprise AI, infrastructure software, workflow automation, deeptech and technology-led consumer businesses.

"There is also a white space for patient seed capital in businesses with strong unit economics that may not be fashionable but have a clear path to category leadership," Shah said.

What decided the structure

Fundraising for the vehicle is currently underway, with GSF in discussions with domestic family offices, founders and high-net-worth individuals. The firm is also open to institutional and international investors that align with its India-focussed investment strategy.

Shah said lessons from the firm's earlier fundraising efforts have influenced the structure of the new vehicle.

"The primary lesson is that investors prioritise clarity regarding the vehicle's structure and the team's decision-making process. This fund is more institutional, with explicit terms and a disciplined commitment period featuring clear drawdown schedules to ensure reliability," he said.

GSF has backed companies including Whatfix, Quizizz, Slintel, CityMall, Gamezop, SalaryBox, Codingal, Bimaplan, Vaultedge and Khabri. It has also recorded several exits over the years through acquisitions of portfolio companies such as Little Eye Labs by Facebook, Viki by Rakuten, Pokkt by AnyMind and DailyRounds by 3M.

More recently, the firm's portfolio has delivered exits through Kirana Club's acquisition by Meesho, while companies such as ZenDuty, Unbox Robotics and Eeki continue to scale. Shah said the firm's recent exit pipeline reinforced its conviction in creating an institutional venture platform.

"This fund is the institutional evolution of a strategy we have refined over 14 years. It introduces sharper underwriting, clearer governance and a transparent way for LPs to participate in early-stage access. Our thesis has been consistently validated by our exit pipeline, including recent successes like Kirana Club and ZenDuty, and rising stars like Unbox and Eeki," he said.

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