Capital A launches Rs 400 cr fund to target manufacturing, climate startups

Venture capital firm Capital A has launched its second fund with a corpus of Rs 400 crore, aimed at startups in high-growth sectors like manufacturing, climate, fintech, and deep-tech. The fund intends to identify innovative technologies and business models that promise to reshape industries and drive sustainability, according to a company statement.

Fund II will invest in 17–20 companies, offering initial investments between $750,000 and $1 million, with total commitments of $2–3 million per company over their growth cycles. Capital A's investor base for the new fund will be largely domestic, comprising family offices, high-net-worth individuals (HNIs), and industry leaders. Manjushree Ventures, a key backer from Capital A’s previous fund, is among the returning investors.

“Many high-potential sectors, especially manufacturing businesses, are highly undervalued assets with great potential to scale quickly and become an important contributor in the startup ecosystem,” said Ankit Kedia, founder, lead investor, Capital A. “Other areas of interest include sectors like climate, deep-tech, and fintech, which continue to be a focus from our previous fund.”

The launch of Fund II comes at a time when India’s climate tech investment landscape is becoming more mainstream. Since 2020, over 475 investors have engaged in climate tech funding, with more than half becoming active in 2023. Last year saw a 25 per cent increase in climate investors, with 124 funds making their first investments in the sector. While overall funding growth has remained moderate, increased investor participation highlights a growing commitment to climate solutions, stated the press release.

Established in 2021, the early-stage investor’s first fund saw success with startups such as Chargeup, Bambrew, Jiraaf, BharatSure, and Entuple.

The second fund aims to play a role in advancing technologies that address critical global challenges while generating long-term returns for investors, stated the press release. The firm targets a final close for Fund II by the end of 2025.