Venture Capital Firm Yali Capital Shuts Down a ₹893 Crore Fund Specializing in Deep Technologies
In a significant development for India's deep tech ecosystem, Yali Capital, a SEBI-registered Category II Alternative Investment Fund (AIF), has successfully closed its maiden deep tech-focused fund at INR 893 crore (approximately USD 104 million).
The fund, which initially aimed to raise INR 500 crore, surpassed its target and also utilized a INR 310 crore greenshoe option. The investment focus will be on deep-tech domains such as semiconductors, artificial intelligence, robotics, genomics, aerospace/surveillance, and smart manufacturing.
Investment Strategy
The fund invests across early-stage (Seed, Series A) and late-stage (Series D and beyond) companies. Approximately 70% of the investment will be allocated to early-stage ventures, while the remaining 30% will be directed towards growth-stage investments. The average investment size ranges from $2 million to $10 million, and ownership targets vary by stage, from about 20% at seed to as low as 5% at late stage.
Portfolio and Status
Yali Capital has already made five investments spanning chip design to AI. The goal is to expand this portfolio to eight portfolio companies by the end of 2025.
Notable Limited Partners (LPs)
Approximately 78% of the capital comes from Indian investors, including entrepreneurs and family offices. Fund-of-funds such as SIDBI's Fund of Funds for Startups (FFS) and the Self-Reliant India Fund are also part of the investor base. Corporate backers include Infosys and Qualcomm, and the fundraise was largely word-of-mouth, without bankers or distributors. Yali Capital’s leadership team committed INR 15 crore each to the fund.
Structure
The fund operates through a SEBI-registered Category II AIF. It also includes a GIFT City-based feeder vehicle to attract global investors.
Looking Forward
Lip-Bu Tan, a veteran investor and advisor to Yali Capital, expressed his belief in India's deep tech capabilities. Ganapathy Subramaniam, Founding Managing Partner of Yali Capital, added that India has a real opportunity to build globally competitive public companies in the deep tech space. Nearly a third of the fund will be invested in late-stage deep tech companies. Tan stated that it is encouraging to see the government, global corporations, and successful entrepreneurs supporting Yali's deep tech thesis. The fund intends to continue deploying capital actively over the next four years.
This fund reflects strong confidence in India’s emerging deep tech ecosystem, with backing from key institutional and corporate LPs and a focus on patient capital in a maturing market.
- Yali Capital, a deep tech-focused SEBI-registered Category II AIF, has successfully raised INR 893 crore for investments in technology-driven startups.
- The fund will allocate around 70% of the investment to early-stage ventures, with an average investment size ranging from $2 million to $10 million.
- Notable limited partners (LPs) include Indian investors such as entrepreneurs and family offices, along with corporate backers like Infosys and Qualcomm, and fund-of-funds like SIDBI's Fund of Funds for Startups (FFS) and the Self-Reliant India Fund.
- With a vision to build globally competitive public companies in the deep tech space, Yali Capital plans to invest nearly a third of the fund in late-stage deep tech companies.
