In a significant development for India's startup ecosystem, domestic venture capital firm A Square Capital is set to launch its maiden early-stage fund targeting $40 million. The Delhi-headquartered firm has applied for a Category I Alternative Investment Fund (AIF) licence from the Securities and Exchange Board of India (Sebi) and expects approval by January or February.
Investment Strategy and Sector Focus
While positioning itself as sector-agnostic, the fund plans to place strong emphasis on several high-growth areas. Approximately 80% of the corpus will be deployed in technology startups, including deep tech, artificial intelligence, and fintech ventures. The remaining 20% is earmarked for consumer goods and direct-to-consumer (D2C) brands.
The fund will specifically target post-revenue companies at the seed to Series A stages, with plans to make 10-15 investments per year. Individual cheque sizes will range between ₹75 lakh and ₹1 crore per deal, providing substantial capital infusion for early-stage ventures.
Funding Structure and Founder Backing
A Square Capital has already secured significant internal commitments, with $20 million committed by its promoter, including managing partner Chahat Agarwal. The firm is currently in advanced discussions with potential limited partners across international markets to raise the remaining capital.
According to sources familiar with the matter, the fund is not currently looking at domestic limited partners, focusing instead on foreign investors to complete the $40 million corpus. Until the Sebi licence is formally obtained, Agarwal has been making personal investments in promising startups.
Beyond Capital: Comprehensive Founder Support
What sets A Square Capital apart is its commitment to providing extensive end-to-end support to portfolio companies. The firm aims to go beyond traditional investment models by offering comprehensive assistance including fundraising support, go-to-market strategy, product development, and scaling guidance.
The fund brings particular expertise in the healthcare sector, with domain knowledge spanning private care, policy, and government systems. This specialized support structure is positioned to work alongside founding teams from idea validation through fundraising and eventual scale-up phases.
Founded by Chahat Agarwal, a marketing and brand professional who previously worked on Oyo's expansion in the UK and Southeast Asia, A Square Capital combines financial backing with strategic operational expertise. The firm's approach reflects the evolving nature of venture capital in India, where investors increasingly provide value-added services beyond mere capital infusion.
Broader Market Context
A Square Capital's entry comes at a time of robust activity in India's early-stage venture capital landscape. Recent months have seen several significant fund announcements, including Blume Ventures' Fund V first close at $175 million and Prime Venture Partners' $100 million Fund V.
According to industry reports, India has already seen more fund launches in 2025 than in the entire previous year. The first nine months of 2025 witnessed investors announcing funds worth over $9 billion, surpassing the $8.7 billion tally for 2024. Notably, nearly 60% of new fund launches this year have been aimed at seed and Series A rounds, indicating strong investor confidence in early-stage Indian startups.
The third quarter of 2025 alone accounted for more than $2.5 billion in new funds across 25 investors, with 17 vehicles specifically targeting early-stage startups. This trend underscores the growing recognition of India's innovation potential across sectors like healthcare, technology, and consumer brands that A Square Capital intends to focus on.
