Antler India eyes record deals in 2025, signaling early-stage funding recovery
“We plan to close about 40-50 investments next year and this should take our total India portfolio to 130-140 from just this fund,” Rajiv Srivatsa, a partner at Antler India, said in an interview. “We anticipate the next year to be a great time to invest in the pre-seed categories as we are seeing more traction in the successive stages, which was not the case last year.”
The VC firm closed 30 investments in 2024, the most so far, and Srivatsa added that the investment firm expects to close a few more deals before the end of this year. In comparison, it had about 22 investments last year, less than 10 in 2022, and 13 in 2021. Currently, it invests out of its $75 million maiden fund in sectors including artificial intelligence, consumer tech, fintech, deeptech, health and climate.
According to Aakash Agrawal, associate director – digital & new-age business at Anand Rathi Investment Banking, while total private investment in startups has remained consistent in 2024 when compared to 2023, it is still at almost half of the peak in 2021 and 2022.
“What is of some concern is that while seed and pre-seed funding is witnessing activity, there is a slowdown at the series A and B levels, which makes the journey somewhat complex for these seed-stage startups as they have typically lesser capital to build out products or services since investors at growth stages are patiently sitting on dry powder, looking to deploy at leisure,” Agrawal said.
Srivatsa didn’t specify the amount that Antler India would invest next year. The average investment by Antler India, which focuses on the pre-seed stages, increased to $250,000 from $175,000 when it started three years ago. Exceptions were made in 20% of the cases where it got its global fund to invest with bigger cheques, Srivatsa said.
The VC firm, alongside Blume Ventures and others, led ride-hailing platform Namma Yatri’s $11 million pre-series A funding round in July. Antler India’s other investments include fashion retail marketplace Bizup, ready-to-cook foods Freshcon, and Inamo, which manages quick commerce dark stores.
Along with Nitin Sharma, who is a partner at the firm, Antler India started in October 2021 seeking to raise a $30-40 million fund to invest across 75-80 startups. As the ecosystem evolved, the VC firm decided to raise a larger fund that could capture opportunities in the market.
Focus on valuations
Almost 40% of the fund is dedicated to follow-on rounds in portfolio companies. The time between the initial cheque and the next round typically ranges from six to nine months, Srivatsa said.
Over the past year, Srivatsa explained that the markets have undergone a deep correction across stages and startups are increasingly focusing on growing into their valuations. With capital being allocated more selectively in contrast to the pandemic times when it was more easily available, he emphasised that companies are placing more importance on growing in a frugal manner with lower burn rates.
There were about 760 investments in the seed stage this year compared with 1,273 in 2023 and 1,751 rounds in 2022, according to market intelligence provider Tracxn. Even series A and B stages deal volumes plummeted this year from levels in the previous two years. Still, there is an uptick in some of the later stages, although they still fall short of 2022 levels.
“A lot of companies have still not hit a realistic valuation metric, and the expectations are different now. While there might be a 20% uptick in funding this year as compared to 2023, which was one of the worst periods, the turnaround is still very slow,” Srivatsa said, adding that there are more sensible valuations in the earlier stages.
Outside India, Antler is present in the US, the Middle East and Africa, Europe and Australia, Indonesia, Japan, Singapore, Vietnam and Malaysia. Almost every country has its own fund with about 15-20% commitments from Antler’s global fund.
