We are proud to share an important milestone in Axilor journey with founder and investor friends – Axilor announced its plans to launch its second fund of $100 million (₹770cr) which will continue to invest in early-stage startups. This announcement comes on the back of the first fund of ₹200 crore most of which has been deployed across 54 companies making Axilor the second most active seed fund in India and one of the top 10 Series A pipeline creators.
The startup ecosystem in India has come a long way since we started. In 2014, we were just in the midst of the first wave of entrepreneurship, most activity limited to a few sectors, with very little institutional capacity to support early-stage startups. There were no good accelerator programs, the seed funding capacity was very low and there were no market networks for startups. Today, the founder quality has grown by leaps and bounds. The startup activity is much more broad-based across sectors and there is a surfeit of choice for founders in raising capital, especially in early stages. But all this notwithstanding, seed to Series A conversion remains the hardest hurdle to cross with just 18% of seed funded startups reaching Series A. And several cracks in governance are beginning to show up as companies emerge from an uber-capitalised, hyper-growth phase.
Axilor was founded with a vision to improve odds of success of early stage startups backed by the legacy of some of the most respected entrepreneurs in India. Like with any successful startup, our vision has remained the same but our model has evolved with the times and in response to the ecosystem. After spending more than 5000 hours of working closely with early-stage startups through the largest and No.1 rated accelerator program, we have been able to take those learnings to develop a unique, deep engagement model to our seed fund. In addition to becoming the second most active seed fund and creating a strong Series A pipeline, we have built a brand which is loved by founders and respected by VCs.
Respect follows performance and any fund’s performance is finally a reflection of the kind of portfolio founders we work with. Thanks to such founders, our results have been incredible. 7 years, 150+ startups engaged, ₹200 crore of capital deployed, 54 investments done, 77% follow-on rate, 48% Seed to Series A conversion and 21 portfolio startups which have already crossed Series A and beyond, making it one of the largest Series A portfolio for any first fund in India. And, a 10% portfolio mortality rate is testament to the perseverance of our portfolio founders. We have been most lucky to find our founder-fund fit – a unique brand of Axilor founders. Founders who are execution focused, founders who have a healthy respect for capital, founders with a strong operator mindset who have set out to build valuable businesses – with or without capital, market cycles or otherwise! It is not a surprise that with such founders more than 50% of our mature portfolio is already at an ARR greater than $1m. And the half-life for this milestone is falling as more and more companies are getting there faster. With an industry leading founder NPS of 67%, we are proud to be seen by founders as being on their side and a fund which is ‘easy to work with’.
Axilor is known by its startups and our startups have made us proud with what they have achieved. More than 50% of our mature portfolio is either No 1 or 2 in their respective categories, and most of them have spent 2-3x less capital than their closest competitors to hit the revenue scale. Several startups have literally launched new categories when none existed. Detect has demonstrated what it takes to build and sell deep-tech products to Fortune 100 companies. Vyapar proved that Indian SMBs pay for software. Niramai, the only Indian company in Global 100 AI companies, proved it is possible to find the perfect intersection of deep tech and a large, global healthcare challenge. Several other companies like Wiz (freight), Brands of Bharat (FMCG), Metal Book (steel), Bizztm (m-commerce) are digitising large but archaic supply chains – one vertical at a time. Companies like Detect (Oil & Gas), Appiyo (BFSI), Leucine (pharma), Maximl (process), Switchon (discrete manufacturing) are building enterprise grade products for large, global verticals with high ACV ($100k+). Companies like Medfin (elective surgeries), Numen (cardio vascular rehabilitation), Cancer Clinic (cancer care), 5CN (radiology) are bringing more affordable models to specialised healthcare verticals. In agri, companies like FreshR (fisheries), Reshamandi (silk) and E-Dairy (cattle) are bringing the power of technology to make these vertical supply chains more efficient and increase farmers’ incomes. And finally, companies like Loco (gaming), Pocket Aces (video), Headfone (audio), Advantage Club (benefits) and Kaagaz (personal cloud) are building category leading consumer products for Digital India.
With this kind of portfolio, we are only excited to be our launching our next fund. The new fund is not just larger but also more founder-friendly. We have incorporated all the learnings from our last fund to make it even more relevant to early-stage founders. It sets aside 30% of the corpus towards cross-over companies – winners from the first fund. It has a tenure of 15 years that allows us to stay longer with our companies. It also has a higher follow-on reserve. We will continue our deep engagement model and a programmatic approach that predictably delivers better outcomes for our startups. Like with our first fund, we will play to our strengths by focusing on capital efficient business models in B2B commerce, healthcare, global enterprise SaaS, fintech and agriculture. We will continue to be thesis-led and invest in areas where we have the expertise and portfolio learnings. Our concentrated sector bets will benefit every incoming founder to learn from the experiences of the portfolio founders and the sectoral play-books.
There is no better time to invest in innovation coming out of India. Seven years into this journey, the original vision of building a platform to improve the odds of success of early stage startups, remains as relevant. But with the ecosystem maturing and founder ambition growing, the scale of our aspiration, needs to keep pace. The new $100m fund is a clear reflection of our continued commitment to help entrepreneurs build valuable companies and reinforce Axilor’s position as the most active seed fund in India. We look forward to the same founder love we have received thus far. Here is to the new beginning!