Yali Capital launches Rs 810 cr deep-tech fund

Deep-tech-focused venture fund Yali Capital on Monday announced the launch of its maiden fund with a target corpus of Rs 810 crore, including a greenshoe option of Rs 310 crore.

The fund is helmed by Ganapathy Subramaniam, a former partner at Celesta Capital, and Mathew Cyriac, former private equity (PE) co-head for Blackstone in India and executive chairman of PE firm Florintree Capital Partners. Lip-Bu Tan, chairman of venture fund Walden International has joined as a fund advisor. Karthik Madathil, who has extensive industry experience with the likes of Texas Instruments, is joining the fund as a partner.

“Deep tech is a foundational technology, yet it is still difficult to sell. But I think things have changed a little with the advent of AI and Nvidia’s success, and suddenly there is a lot of attention in deep tech and semiconductors… I think the big wave for the sector will happen in India and I’m very excited to be involved,” Tan said during the fund’s launch.

Subramaniam, Cyriac and Tan will collectively put $15 million (Rs 125 crore) into the fund. The fund is set to invest in four firms by the end of September this year, Subramaniam said during its launch event. It will invest in about eight to 10 firms in total, and then put in follow-on investments, from the current fund.

“We believe sectors like genomics and smart manufacturing will be huge opportunities in India in the near future… Beyond that, a lot of top talent in artificial intelligence is Indian,” Subramaniam said.

Besides the Rs 500 crore initial target, the fund will have a greenshoe option of Rs 310 crore, which is a provision that allows a fund to raise more capital than originally targeted if there’s a higher demand than initially expected.

The fund is a Sebi-approved Category 2 Alternate Investment Fund (AIF) and aims to invest in areas such as chip design, robotics, genomics, smart manufacturing, aerospace, AI and other such sectors with deep tech as its base.

“A substantial chunk of our capital has come from investors who will actively help these startups with improving their product and strategy… We also have a great monetising experience between me and Lip-Bu. At some point, a lot of these firms may be acquired by, say, a Western strategic (player) . That’s not something that just happens; it is often something that you have to build towards,” Cyriac said.