The fund managed by GVFL (earlier called Gujarat Venture Finance Ltd) known as GVFL Prarambh Fund has sailed through its first close at INR 100 Crores. It forms one of the most strategic seed-stage funds to support new technology and innovative firms in India.
Seed Stage Focus and Transaction
GVFL Prarambh Fund focuses on delivering strategic cash infusions at the seed and pre-revenue levels of startups. Given the goal of supporting young companies before they enter a more active phase of development, the fund can make their growth curve steeper.
The fund commonly invests between Rs 50 Lakhs to Rs 3 Crore per deal. These are in the form of convertible notes, CCPs, and equity, and the investors intend to buy between 10% to 15% of the share capital of these target startups.
Fund Size and Valuation
The GVFL Prarambh Fund has a total fund size of INR 100 Crores which is a sufficient money pool to risk to start-ups within the Indian ecosystem. In addition to the funds, GVFL Prarambh Fund provides significant non-financial support to its portfolio companies. This includes creating links and contacts, ensuring the organization has strong structures as well as helping in the next rounds of fundraising.
Product-Market Fit
The fund specifically targets companies that are founded by passionate and competent CEOs who have the necessary experience in the specific industry. Having a competent founding team to facilitate growth in the initial stages of business and capitalize on the market opportunity is crucial. GVFL is looking for startups that have product market fit with a proof of concept through revenue generation, partnerships, and user adoption. This criterion ensures that investee companies are well-placed to grow and scale to meet market needs.
Innovative and Scalable Potential
The fund targets companies that apply new technologies or business models to challenge existing industries or meet essential market demands. Through funding disruptive innovation, GVFL envisages investing in companies with the potential to create noticeable shifts within the markets and overall value. The possibility of scaling is therefore one of the attributes considered while choosing the candidates to invest in. The fund is aimed at early-stage companies with a potentially high growth rate and the ability to expand their market share.
Value Added Support from the fund
Being sector-agnostic, GVFL prefers to invest in startups operating in sectors in which the firm has considerable experience and a record of past successes. This alignment ensures portfolio companies complement each other and the fund can offer added value support to portfolio companies.
GVFL Emerging Enterprises Fund
The GVFL Emerging Enterprises Fund was started in June 2022 and with a complete investment life cycle experience of over three decades in startup investment. The fund aims at the startup and growth phase companies and Micro, Small, and Medium-sized enterprises. It funds businesses of technology orientation spanning across diverse industries. The fund hereby prefers an asset-light business model. The minimum and maximum amount invested is between Rs. 5 crore and Rs. 20 crores.
Conclusion
The first close of the GVFL Prarambh Fund would be a turning point in the Indian startup story. Specializing in seed financing with a significant emphasis on supporting youthful firms, this fund is certain to foster innovation and deliver sustainable development. This fund continues that support at GVFL, which actively looks for differentiated investments in innovative early-stage startups.
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