Volt VC Unveils New Fund to Support Early-Stage Startups in India

On Wednesday, Volt VC, an emerging micro venture capital firm based in Ahmedabad, made headlines with the official launch of its inaugural fund. Named Volt VC Fund-1, the new initiative is set to significantly impact the startup landscape by focusing on early-stage consumer-centric ventures.

Aiming for Rs 45 Crore Corpus

Volt VC Fund-1 is targeting a substantial corpus of Rs 45 crore, with plans to invest in 20 to 25 pre-seed startups across diverse sectors. The fund will particularly concentrate on direct-to-consumer (D2C), business-to-consumer (B2C), and business-to-business-to-consumer (B2B2C) models, reflecting a strategic focus on innovative consumer-focused businesses.

Addressing the Funding Gap

Param Patel, General Partner at Volt VC, highlighted a notable gap in the current venture capital ecosystem. "In India, we've observed a rise in pre-seed and seed funds, but many offer ticket sizes between Rs 4 crore and Rs 10 crore. Many startups are unable to absorb such large amounts at their early stages," Patel remarked. He emphasized Volt VC's role in filling this niche by offering smaller, more manageable investments. "Our local presence in Gujarat is expected to attract a significant number of Gujarat-based startups looking for initial institutional funding," he added.

Investment Strategy and Future Plans

Volt VC plans to write cheques ranging from Rs 50 lakh to Rs 2 crore. The fund's investments will be sourced from ultra-high-net-worth individuals (UHNIs), entrepreneurs, and startup founders, aiming to close the fund within the next three to four months. Patel also shared future intentions to provide follow-on investments in approximately five standout startups from the initial fund, supporting their growth as they advance to the seed stage.

A Growing Trend of Micro VC Funds in India

1. This launch comes at a time when India is witnessing a surge in domestic micro venture capital firms. These firms are playing a crucial role in nurturing startups at very early stages, often with smaller cheque sizes compared to their established counterparts. Notably, Aviral Bhatnagar recently launched a Rs 100 crore micro VC fund aimed at early-stage startups, focusing solely on the pre-seed stage. Other prominent micro VCs include Vaibhav Domkundwar's Better Capital, deeptech-centric Java Capital, and Delhi-based Sauce VC, known for its investments in the consumer sector.