India: AUM Ventures makes first close of second deeptech fund at $24m

AUM Ventures has completed the first close of its India Innovation Fund II at Rs 225 crore (about $23.6 million), targeting a total corpus of Rs 750 crore as it steps up investments in deeptech startups. The early-stage venture capital firm said the fund will back globally competitive, IP-led technology companies across sectors including space tech, artificial intelligence, semiconductors, aerospace and defence, robotics, energy transition, and advanced manufacturing. Initial cheque sizes will range from $750,000 to $2 million, with capital reserved for follow-on investments into Series A and Series B rounds.

Direct quote

"building for the world," and backing "IP-led technology companies in India," are central to the fund's strategy, the firm said as it outlined its sector focus and investment approach.

Details and context

The first close drew participation from both existing and new investors. More than 65% of the corpus raised in this round has come from international limited partners, including family offices, entrepreneurs, and strategic investors from the US, the Middle East and other markets. AUM Ventures expects to deploy the fund primarily at the pre-seed and seed stages, while retaining dry powder to support portfolio companies into later rounds.

AUM Ventures' inaugural fund — a $30 million vehicle — invested in a cohort of technology startups that included Skyroot Aerospace, Smiles.ai, Svish, Esports XO, Fenix, Myways.ai and Firstsense. The new vehicle aims to build on that portfolio experience, concentrating on frontier technologies that require longer development timelines and significant capital to commercialise.

The fund's sector list underscores a broad mandate across hardware- and science-driven areas: space and aerospace, defence tech, semiconductors, robotics, artificial intelligence, energy transition and advanced manufacturing. This emphasis reflects investor appetite for IP-driven businesses capable of serving global markets from India.

• First close size: Rs 225 crore (~$23.6 million)
• Target corpus: Rs 750 crore
• Initial cheque sizes: $750,000–$2 million
• Follow-on reserves: Series A and Series B
• First fund corpus: $30 million (portfolio includes Skyroot Aerospace, Smiles.ai, Svish, Esports XO, Fenix, Myways.ai, Firstsense)
• LP mix: >65% international limited partners from the US, the Middle East and other regions

Outlook

AUM Ventures plans to use the new fund to accelerate investments in startups seeking to develop proprietary technologies and global go-to-market opportunities. By allocating initial cheques in the $750,000–$2 million band and preserving capital for follow-on rounds, the firm is positioning itself to support companies through the earliest phases of productisation and commercial growth.

The move comes as India’s deeptech ecosystem attracts more dedicated capital: the government has backed initiatives such as a Rs 1-lakh-crore Research, Development, and Innovation Fund-of-Funds (RDI Scheme), and other VCs have raised vehicles focused on science- and engineering-led startups. Recent fundraises in the space include BlueHill Capital’s Rs 300 crore-plus raise and Inflexor Ventures’ first close for a $40 million fund, signalling broader investor interest in the complex, capital-intensive startups AUM Ventures intends to back.