SEBI-registered Chanakya Fund Trust launches INR 100 Cr fund for investing in tech and manufacturing startups
- ByStartupStory | April 26, 2023
Chanakya Fund Trust has announced the launch of its first-ever sector-agnostic fund, worth INR 100 Cr ($12.5 Mn), to invest in small and medium enterprises (SMEs) and startups. The SEBI-registered Category-II alternative investment fund, Chanakya Opportunities Fund I, will have a greenshoe option of INR 100 Cr. The fund aims to invest in profitable SME companies that have high potential in unorganised sectors. The corpus would allocate 51% of investments in manufacturing, tech and consumer product startups.
The Chanakya Opportunities Fund I will invest between INR 2 Cr to INR 10 Cr in about 25 high-potential companies, according to a statement by the SEBI-registered Category-II alternative investment fund. The fund will reserve 51% of its corpus for investment in startups in the manufacturing, tech and consumer product sectors. The fund aims to provide exit opportunities through primary markets, targeting small ticket size IPOs on SME exchanges. The Trust plans to attract capital from high-net-worth individuals, resident and non-resident Indians, banks, corporates, trusts and accredited investors. “This is a close-ended fund, and we will be accepting subscriptions for the tenure of five years from the first close with a maximum of two extensions of one year each,” said Kresha Gupta, founder and fund manager of Chanakya Fund Trust.
The launch of Chanakya Opportunities Fund I, a new INR 100 Cr ($12.5 Mn) sector-agnostic fund to invest in Indian startups and small and medium enterprises (SMEs), is a welcome move at a time when investors are holding onto their cash and avoiding investments in the country’s startups due to macroeconomic headwinds, concerns over global recession, and a sharp decline in valuations of listed firms. The fund has been launched amidst worries over corporate governance issues at startups such as Zilingo, GoMechanic, and BharatPe, which have made investors more cautious and hesitant to invest.
Despite the challenges faced by the Indian startup ecosystem, investors remain optimistic and are raising fresh funds. Real Time Angel Fund recently announced the second close of its debut fund at INR 125 Cr, while venture capital firm Speciale Invest launched an INR 200 Cr growth fund earlier this month. In 2022, 126 new funds were launched in India, raising a total corpus of $18 Bn, according to Inc42.
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