Venture Capital firm Yali Capital officially launched on Monday with its Rs 810 crore Yali Deep Tech Fund-I. The fund is exclusively dedicated to nurturing and scaling early-stage deep tech startups across the country, providing them with the necessary financial backing, mentorship and global connections to drive innovation and growth.
The VC firm’s investment strategy will centre on a few key areas within deep tech, including Fabless chip design, Robotics, Aerospace and Defence, Manufacturing, Genomics/Life Science, AI and Generative AI.
“I believe within three to four years we will deploy this Rs 810 crore in over 15 companies with the average check size starting from Rs 15 crore to Rs 80 crore per company,” Ganapathy Subramaniam, Founding Managing Partner at Yali Capital told BW Businessworld.
Yali Capital has set a target corpus of Rs 510 crore, with an additional Rs 310 crore available through a greenshoe option. This financial muscle is supported by a network of co-investors and connections to top-tier venture arms globally, offering startups access to capital and market opportunities.
As per a nasscom report, India has over 3,600 deep tech startups, with 480 of these being founded in 2023 alone, almost double the number established in 2022. In the calendar year 2023, Indian DeepTech startups attracted USD 850 million in investments, a 77 per cent decrease compared to 2022. The majority of these investments went to AI startups. Both early and late-stage deals have seen a decline of over 60 per cent.
Initial Fund Status And Future Plans
As of the launch date, Yali Capital is a Sebi-approved Category 2 Alternative Investment Fund (AIF). It has also established a GIFT City vehicle to facilitate investments from non-Indian investors. The firm said 60 per cent of the target corpus is either signed or in the legal agreement phase.
Yali Capital has already identified four deep tech startups that will receive investments by the Q3 of 2024. Legal agreements with these startups are reportedly in the final phase, signaling a strong start for the new venture.
The managing partners, Ganapathy Subramaniam, Mathew Cyriac and Lip-Bu Tan, will collectively invest USD 15 million into the fund.
On future expansion of funds, Subramaniam said, “I’m sure there will be a series of funds to follow. But we will, at this point of the time, focus on Yali Deep Tech Fund-I. We will execute it rightly and then we will move on to raising the next funds. But our thesis will not change. It will largely remain deep tech.”
“Current fund is early stage, but in future we could do something in the Series B to C also, or could be a multi-stage,” he added.
State-of-the-Art Facility And Mentorship Programme
The VC firm has established a 4,000 square feet facility in Bangalore, designed to support startups during their critical early years. This space will provide startups with the infrastructure and resources needed to develop their technologies and bring them to market. Additionally, Yali Capital said it will offer deep mentorship programmes, drawing on the expertise of seasoned professionals and successful entrepreneurs. This mentorship will consist both technology and business guidance.
Focus Areas And Team
While Yali Capital’s investment thesis is deeply rooted in deep tech, its particular focus will be chip design. The VC firm plans to draw from the immense semiconductor design industry experience of the team.
The leadership team at Yali Capital currently consists three partners and an advisor:
Ganapathy (Gani) Subramaniam, Founding Managing Partner: With over 30 years of industry experience, Subramaniam has a diverse background in venture funding, angel investment, entrepreneurship, and senior corporate roles. He has previously founded Cosmic Circuits, which was acquired by Cadence, and chaired Cirel Systems, which was acquired by Micron Technology.
Mathew Cyriac, General Partner: Cyriac is the Chairman of Florintree Advisors and the former Co-head of Blackstone India PE, where he managed USD 3 billion in assets. An alumnus of IIM, he played key roles in taking MTAR, Data Patterns, and ideaForge public. He is also the Chairman of Gokaldas Exports and serves on the boards of Tata Capital and Tata Play.
Lip-Bu Tan, Advisor: Chairman of Walden International and Managing Partner of Walden Catalyst, Lip-Bu brings nearly 40 years of venture experience. He is the former CEO of Cadence Design Systems and has overseen 130+ companies going public. He serves on the boards of Intel and Schneider Electric.
Karthik Madathil, Partner: With 30 years of DeepTech experience, Karthik has held leadership roles in both startups and multinational corporations. He is an IIT graduate and has founded an ML-powered EdTech company.
The team will be further strengthened by the planned addition of three more partners within the next three to six months.
The fund’s Limited Partner (LP) pool includes globally recognised tech executives, entrepreneurs, top family offices and large corporations.
