Yali Capital, a Bengaluru-based investment firm, has raised ₹893 crore (around $104 million) for its first fund focused on deep technology. This amount is much more than their original goal of ₹500 crore, including an extra ₹310 crore they had set aside in case of more demand.
This fund, approved by SEBI under Category II AIF, will invest in both early and late-stage tech companies in areas like semiconductors, artificial intelligence (AI), robotics, aerospace, and smart manufacturing.
Ganapathy Subramaniam, the Founding Managing Partner, said that the fund was raised entirely through word-of-mouth – without using any bankers or agents. About 78% of the money came from Indian investors such as entrepreneurs, family offices, government funds like SIDBI’s Fund of Funds and the Self-Reliant India Fund, and big companies like Infosys and Qualcomm. The Yali leadership team also invested ₹15 crore each in the fund.
Yali Capital uses a two-part structure – one part is registered in India (SEBI AIF), and the other is based in GIFT City to attract global investors.
So far, they have already invested in five startups, and they plan to invest in three more by the end of 2024. Each investment will range from $2 million to $10 million, and Yali will own between 20% in early-stage companies to around 5% in later-stage ones.
They plan to use 70% of the fund for early-stage startups and the remaining 30% for more established companies (Series D and beyond). Within the early-stage funding, 45% will go to first-time investments and 25% to follow-up funding. They won’t invest in secondary shares (i.e., buying from existing investors).
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Subramaniam, who has previously supported tech firms like Cosmic Circuits and IdeaForge, said Yali is more than just a money provider. “We actively work with startup founders to help bring their ideas to life,” he explained.
For early-stage companies, Yali is focusing on experienced founders or those from top universities. For later-stage companies, they’re relying on partner Mathew Cyriac’s experience, especially in taking companies like MTAR Technologies and Data Patterns public.
“There are many deeptech companies in India with good revenue but facing challenges in scaling. We want to support them with capital and help them grow faster,” said Subramaniam.
He added that India has a strong talent pool in chip design but needs to build more companies that can compete globally. Yali expects to announce a big investment in chip design soon.
While India’s deeptech market is still developing, the strong interest from investors and founders shows that the future is promising. “The ecosystem is improving. Now, we just need patient capital and strong execution,” Subramaniam concluded.
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