Early-stage venture capital firm a99 (formerly Artha99) has started preparing for its third fund, targeting USD 100 million (about ₹850–885 crore). The firm wants to channel this fresh pool of capital into the next wave of Indian startups driving innovation in manufacturing and infrastructure.
A New Chapter in a99’s Journey
Vignesh Shankar, founder and managing partner of a99, confirmed that the firm aims to deploy capital across 12–15 companies. Each investment will range between USD 5 million and USD 10 million, focusing on startups between the Pre-Series A and Series B stages. This positioning signals a clear intent: a99 wants to play an anchor role in scaling ventures that can transform industrial operations, logistics, and infrastructure capabilities across India.
The firm has already received soft commitments worth USD 30 million from a mix of existing and new limited partners (LPs). Shankar stated that the fund expects a first close by April 2026. Unlike the second vehicle, the new fund will not include a greenshoe option, making its target size fixed at USD 100 million.
Building on a Strong Foundation
Founded in 2021, a99 quickly developed a reputation as a specialist investor in industrial technologies and enterprises. Unlike many venture firms chasing consumer internet or fintech waves, a99 carved out a differentiated playbook—focusing on the physical backbone of the economy.
Its second fund launched in 2022 with a modest target of ₹50 crore but soon expanded to ₹105 crore. Through this vehicle, a99 supported Aditya Avartan, Intangles, Innocule, EzeRx, Lyzr.ai, and Raptee. Each of these startups tackles critical bottlenecks in industrial operations, ranging from predictive maintenance and advanced materials to clean energy and AI-driven enterprise tools.
The first fund included investments in Vajro, Intents Mobi, and Sarva. Among these bets, one exit stood out: when Futurice UK acquired Vajro, a99 booked a 7X return. That outcome underscored the firm’s ability to identify promising ventures and deliver meaningful returns despite operating in complex, capital-intensive verticals.
Why Manufacturing and Infrastructure Now?
The decision to double down on manufacturing and infrastructure does not come in isolation. India today sits at the center of global supply chain shifts. Rising geopolitical tensions, the China-plus-one strategy, and domestic policy reforms have made India an attractive hub for production and industrial innovation.
The ‘Make in India’ programme, launched by the government, has accelerated this momentum. Production-linked incentives (PLI) and state subsidies provide strong incentives for both multinational corporations and local entrepreneurs. For instance, the electronics sector demonstrates India’s manufacturing potential. The country has emerged as the second-largest mobile phone producer, manufacturing over 325 million devices annually. Giants such as Apple and Samsung continue to expand their local footprint, with reports indicating that Apple will ramp up production of the iPhone 17 across its five Indian factories.
Infrastructure also demands urgent innovation. From green logistics to renewable energy integration and smart mobility, India faces opportunities to leapfrog legacy systems and create new industrial frameworks. By targeting early-stage ventures in this space, a99 positions itself to ride a multi-decade wave of growth.
a99’s Investment Philosophy
Unlike generalist venture firms, a99 pursues sectoral specialization. Vignesh Shankar and his team believe that industrial technology requires patient capital, domain expertise, and networks that can open doors to supply chains and global partnerships.
The firm writes relatively large cheques (USD 5–10 million) compared to the average early-stage fund in India. This strategy allows portfolio companies to scale rapidly and capture market share before competitors react. By focusing on Pre-Series A to Series B rounds, a99 takes startups from early product-market fit to significant revenue growth, bridging the often critical funding gap in India’s industrial innovation ecosystem.
Furthermore, a99 actively engages with founders. It offers not just capital but strategic guidance, access to industrial partners, and cross-border connections. The firm treats each portfolio company as a long-term collaborator rather than a short-term bet.
Track Record and Emerging Stars
Several of a99’s portfolio companies exemplify its thesis:
- Intangles: Develops digital twin and predictive maintenance technology for vehicles and industrial equipment.
- Innocule: Works on advanced material solutions that improve efficiency in heavy industries.
- Raptee: An electric motorcycle company building high-performance EVs tailored for Indian roads.
- Lyzr.ai: Focuses on enterprise AI tools that streamline decision-making and industrial operations.
- EzeRx: Innovates in health-tech with devices designed for early detection of diseases, particularly in underserved regions.
These startups highlight the breadth of a99’s interests—from green mobility and AI to materials science and healthcare diagnostics. Each addresses structural gaps in India’s industrial and infrastructural framework.
Challenges on the Horizon
While the opportunity looks promising, risks remain. Industrial and infrastructure startups often demand longer gestation periods and higher capital intensity compared to consumer-facing ventures. Returns may take longer to realize, and execution risks remain high.
Global macroeconomic conditions also influence fundraising cycles. Interest rate fluctuations, currency volatility, and geopolitical tensions could affect capital flows into emerging markets. However, a99’s strategy of securing early commitments from a blend of existing and new LPs signals confidence in its model.
Global and Domestic Context
Globally, investors have started showing stronger interest in climate tech, mobility, and advanced manufacturing. Funds in the US and Europe have raised billions to address decarbonization and industrial resilience. India, with its growing domestic demand and cost advantages, stands as a natural beneficiary of this trend.
Domestically, the PLI schemes cover sectors such as electronics, auto components, semiconductors, solar modules, and green hydrogen. State governments also compete to attract manufacturing projects by offering land, tax incentives, and infrastructure support. These policies create fertile ground for startups that provide enabling technologies, making them attractive to funds like a99.
The Road Ahead
As a99 prepares for its third fund, it has a clear roadmap:
- Fund Size: USD 100 million, no greenshoe.
- Investment Strategy: 12–15 startups, USD 5–10 million each.
- Focus Sectors: Manufacturing and infrastructure.
- Stage: Pre-Series A to Series B.
- Timeline: First close by April 2026.
- LP Base: Mix of existing and new investors, with USD 30 million already soft-committed.
This strategy fits seamlessly into India’s macroeconomic narrative. With manufacturing value chains shifting globally, India has a chance to capture significant market share, and a99 intends to position its portfolio companies as critical enablers of this transformation.
Conclusion
a99’s third fund represents more than just another fundraising milestone. It symbolizes the growing recognition that India’s future growth depends on its ability to innovate in manufacturing, logistics, and infrastructure. By committing to these sectors, a99 signals confidence in India’s industrial resurgence and offers founders the firepower to scale globally relevant companies.
The firm’s track record of strategic bets, successful exits, and deep sector focus provides it with credibility. If executed well, this USD 100 million fund could become a catalyst for the next generation of industrial champions, shaping not only India’s startup ecosystem but also its long-term economic resilience.
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