Cactus Partners is preparing to raise Rs 1,600 crore for its second venture capital fund, with plans to invest in 13 to 15 startups over the coming years.
The proposed fund would be considerably larger than the firm’s first fund, which had a corpus of Rs 630 crore. For Fund II, Cactus Partners is looking to make initial investments of Rs 60 crore to Rs 100 crore in each selected company.
The Financial Express reported the plans following an interview with Cactus Partners General Partner Amit Sharma.
Larger cheques for growth-stage companies
Cactus Partners intends to focus primarily on companies raising between $10 million and $20 million. The firm plans to lead these funding rounds by investing between $6 million and $10 million, while bringing in other investors for the remaining capital.
This approach would allow the venture firm to take a meaningful position in its portfolio companies while sharing larger funding requirements with co-investors.
The planned portfolio of 13 to 15 companies also indicates that Fund II will continue to follow a selective investment strategy rather than spreading capital across a large number of early-stage bets.
Advanced manufacturing and enterprise technology remain central
Cactus Partners invests across advanced manufacturing, enterprise technology and consumer-focused businesses.
Within these broader areas, the firm is evaluating opportunities in robotics, semiconductors, defence, spacetech, electronics manufacturing, artificial intelligence, machine learning, cybersecurity, healthtech and vertical software.
The firm is also studying emerging opportunities in cybersecurity and quantum technologies.
The range of sectors reflects Cactus Partners’ interest in companies building specialised products and technologies for industrial, business and consumer markets.
First fund deployed across 13 companies
Cactus Partners’ first fund, with a corpus of Rs 630 crore, has been deployed across 13 companies.
Its portfolio includes Bellatrix Aerospace, Kapture CX, Indigrid Technologies and Brandworks. During the past 15 months, the firm made new investments in Bellatrix Aerospace, Showroom B2B and Brandworks.
It also participated in follow-on funding rounds for existing portfolio companies, allowing the firm to continue supporting businesses after its initial investment.
Bellatrix Aerospace operates in the spacetech segment, while the other named investments give Cactus Partners exposure to enterprise software, industrial technology, business-to-business commerce and manufacturing-linked opportunities.
Product-market fit and sustainable economics to guide investments
Cactus Partners is expected to remain disciplined while selecting companies for Fund II.
The firm is looking for startups that have demonstrated product-market fit, sustainable unit economics and the ability to build long-term growth. Its investment strategy is not centred on pursuing sectors simply because they are attracting high valuations.
That focus will place greater emphasis on the underlying strength of a company’s business model, customer demand and growth potential.
With larger planned cheques and a limited number of investments, Fund II will give Cactus Partners more capital to support companies seeking substantial growth funding. The final deployment will depend on the opportunities the firm identifies across its chosen sectors.
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