Aum Ventures has reached the first close of its India Innovation Fund II at ₹225 crore (approximately $23.6 million), drawing more than 65% of that capital from international limited partners based in the United States, West Asia, and other global markets — an LP composition that is structurally unusual for an Indian fund writing checks at the pre-seed and seed stages. The fund targets a full corpus of ₹750 crore (approximately $78.7 million) and plans to back 25 to 30 Indian deeptech startups over a five-year investment period.
The arrival of a global LP majority at the earliest end of India’s venture capital stack is not incidental. It is a data point that reads differently in August 2026 than it would have three years ago: one of Aum Ventures’ portfolio companies reached the Indian Ocean’s edge of outer space last month, and a new ₹1.27 lakh crore ($13.3 billion) semiconductor mission is actively subsidizing the class of IP-led chip design startups the fund intends to continue backing — as detailed in TechTimes’ coverage of ISM 2.0.
Pre-Seed Deeptech Is Historically Hard to Fund From Abroad
Deeptech startups — companies built on substantial scientific or engineering breakthroughs that require lengthy research and development before commercialization — carry a fundamentally different risk profile from software ventures. Their primary risk is technical, not market: the market need is usually clear, but proving the technology works and then scaling it to production can take a decade and require patient capital throughout. Most international limited partners have historically preferred to enter Indian venture at the growth stage, when technical risk has been reduced and a domestic fund’s track record is legible.
A fund that can attract more than half its first-close capital from global LPs at the pre-seed and seed stage has cleared a bar the Indian deeptech ecosystem rarely crosses at this size. It typically requires either a demonstrably strong prior fund or a portfolio event that rewrites the risk calculus — or, in Aum Ventures’ case, both.
Fund I’s Numbers and Their Context
Aum Ventures’ maiden fund, launched in 2023, has reported a gross multiple on invested capital (MOIC) of 2.23x and a gross internal rate of return (IRR) of 53%. These are the figures the firm has presented to prospective Fund II limited partners
Readers familiar with venture performance metrics should note the qualifier “gross” on both figures. Gross metrics reflect returns before management fees and carried interest are deducted; net IRR and net MOIC — the figures that LPs actually receive — are materially lower. Independent analysts reviewing comparable debut India deeptech funds have noted that early-stage fund performance figures of this vintage are typically “marked by the manager” — meaning they reflect internal valuation marks rather than realized cash distributions, and should be treated as promising leading indicators, not settled track records. Aum Ventures launched its first fund only in 2023, meaning these figures represent roughly two to three years of unrealized appreciation on a portfolio that has not yet produced exits at scale.
The exception is one confirmed exit. In February 2026, Aum Ventures exited Sharang Shakti, an AI-led defense startup, through its acquisition by LAT Aerospace. The fund has also reported valuation gains exceeding 14x on two portfolio companies — figures that are plausible given one portfolio company’s trajectory but remain self-reported and unrealized for the most part.
That portfolio company is Skyroot Aerospace.
What Skyroot’s Trajectory Tells Global LPs
Aum Ventures was an early investor in Skyroot Aerospace, the Hyderabad-based private launch vehicle company co-founded by former ISRO engineers Pawan Kumar Chandana and Naga Bharath Daka. On May 7, 2026, Skyroot raised $60 million in a Series C round co-led by Singapore’s sovereign wealth fund GIC and Sherpalo Ventures, with BlackRock-managed funds also participating, vaulting the company to a $1.1 billion post-money valuation — as confirmed in Bloomberg’s reporting on the raise. That made Skyroot India’s first space-technology unicorn.
Ten weeks later, on July 18, 2026, Skyroot’s Vikram-1 rocket lifted off from the Satish Dhawan Space Centre in Sriharikota, Andhra Pradesh, and placed four customer payloads — including a German technology demonstration — into a 450-kilometer low Earth orbit 17 minutes after launch. India became the third country, after the United States and China, where a private company — not a government agency — has successfully placed payloads into orbit.
For an international LP evaluating whether India’s early-stage deeptech funds can actually produce the kind of returns that justify the asset class’s illiquidity and technical risk, Skyroot’s arc from seed-stage startup to orbiting rocket company provides exactly the data point they need.
“Skyroot Aerospace achieving unicorn status marks a tipping point in demonstrating that Indian space technology is a venture-scale opportunity, as opposed to only being an aspiration led by science or government,” Kushal Bhagia, co-founder and partner at All In Capital, told Forbes India after the announcement.
Why Seed-Stage India Deeptech Looks Fundable in August 2026
Three structural changes in India’s technology ecosystem have materially lowered the risk floor for pre-seed and seed-stage investment in hardware-intensive startups.
The first is the Indian Space Policy 2023, which followed reforms introduced in 2020 that opened ISRO’s facilities and expertise to private firms through IN-SPACe, India’s space privatization body (the Indian National Space Promotion and Authorisation Centre). Before 2020, India’s space sector was a government monopoly; as of 2026, more than 400 space startups operate in the country, compared with one in 2014. The policy change did not merely open a regulatory door — it created a structure where private companies can access ISRO’s testing infrastructure, dramatically reducing the capital floor required to reach technical validation milestones that would otherwise take hundreds of millions of dollars.
The second is India’s fabless semiconductor design ecosystem. India’s semiconductor ambitions have historically been handicapped by the absence of domestic fabrication facilities. But the fabless model — designing chips in India and outsourcing manufacturing to foundries like TSMC or Samsung — means that a startup building a custom system-on-chip does not need to own a fab to be fundable. India has accumulated more than one million VLSI (very large scale integration) design engineers through decades of multinational research and development centers, and that engineering bench is now spinning out independent startups. The Design Linked Incentive (DLI) scheme under the India Semiconductor Mission covers up to 50% of eligible expenses for chip design startups and subsidizes access to electronic design automation tools and foundry services — meaning the government is effectively co-investing in IP development. Aum Ventures’ portfolio company Azimuth AI is building a custom system-on-chip platform using precisely this model: fabless design, IP-led, fundable at pre-seed because the capital requirement is for engineering, not fabrication.
The third is India Semiconductor Mission 2.0 (ISM 2.0), announced in early 2026, with a ₹1.27 lakh crore (approximately $13.3 billion) outlay targeting chip design, manufacturing equipment, and advanced fabrication. The government is targeting at least 50 fabless semiconductor companies in the next phase of the program. That procurement demand — government-backed and growing — reduces the market risk that deeptech investors historically struggled to price.
Fund II’s Investment Mandate
India Innovation Fund II is registered with the Securities and Exchange Board of India as a Category II Alternative Investment Fund (AIF), the regulatory classification for privately pooled vehicles aimed at sophisticated institutional and high-net-worth investors. The fund is domiciled in the United Arab Emirates — a common offshore structure for India-focused funds seeking to accommodate international LPs’ tax and legal preferences.
The fund will write initial checks of $750,000 to $2 million, with reserves for follow-on investment at the Series A and B stages. Sector focus is concentrated on artificial intelligence, space technology, semiconductor design, and defense technology — sectors that Aum Ventures describes as IP-driven and innovation-led: companies whose competitive moats come from proprietary technology, not from distribution, branding, or business-model execution alone.
Aum Ventures was founded in 2022 and has deployed roughly $30 million across 24 early-stage companies — including Skyroot Aerospace, Cosmoserve Space, Sanyark Space, Sully.ai, and Latent AI — as detailed in Inc42’s coverage of the fund close.
Aum Is Not the Only Fund Closing Now
The Aum Ventures first close lands in a week when a parallel Indian deeptech fund also announced a first close. Piper Serica, a Mumbai-based asset management firm, raised ₹300 crore (approximately $31.5 million) in the first close of its ₹800 crore (approximately $84.0 million) Bharat Tech Fund on August 5, 2026 — five days before Aum’s announcement. Piper Serica’s Bharat Tech Fund targets Series A and B companies rather than pre-seed and seed — per Business Standard’s reporting — and it raised its first close within 45 days of launch.
The simultaneous closes point to a fundraising environment where Indian deeptech is no longer waiting for one validating proof of concept. It has several: a private orbital launch, three commercial semiconductor packaging plants shipping chips, and a government commitment of $13.3 billion to the chip design and fabrication value chain.
Groww’s co-founders are reported to be finalizing plans for a ₹400 to ₹500 crore (approximately $42 to $52.5 million) fund focused on seed and early-stage startups, including deeptech — though this remains unconfirmed per Inc42 reporting.
In 2025, Indian deeptech startups raised approximately $500 million across 87 deals, making the segment the third most funded startup category in the country after e-commerce and fintech. Total investment in the segment reached $166 million in the first quarter of 2026 alone. Analysts project India’s deeptech market to grow roughly 2.5x, from approximately $9 to $12 billion in FY25 to around $30 billion by 2030, driven by defense procurement and advances in robotics and semiconductor design.
Government Policy Behind the Fundraising Surge
India’s policy architecture has added tailwinds to the private capital surge. The government has extended Startup India recognition eligibility for deeptech companies to 20 years — double the 10-year window for conventional startups — and raised the revenue threshold that qualifies deeptech companies for associated schemes to ₹300 crore (approximately $31.5 million). More broadly, the government’s Research, Development and Innovation Fund carries a corpus of ₹1 lakh crore, representing a significant structural commitment to private-sector-led deep technology research.
These policy signals are legible to international capital. When a government commits $13.3 billion to a semiconductor mission and simultaneously extends the regulatory runway for the startups building on top of it, the implicit subsidy to early-stage investors — reduced market risk through demand creation — becomes part of the investable thesis.
The closing question for Fund II is not whether the thesis is credible. Skyroot’s July orbit answered that. The question is whether Aum Ventures can deploy capital at the pace its mandate requires — 25 to 30 investments over five years — and whether the portfolio companies it backs can sustain the kind of technical progress that produces a second orbit, a second unicorn, and the growth-stage returns that will eventually attract the international capital currently watching from the sidelines.
Frequently Asked Questions
What makes Aum Ventures’ 65% international LP composition unusual for an Indian fund at this stage?
Most international limited partners — the institutional investors, sovereign wealth funds, and family offices that commit capital to venture funds — have historically entered the Indian venture ecosystem at the growth stage, after a fund has deployed its first vehicle and can show realized or near-realized returns. Backing a pre-seed and seed stage fund requires tolerating the full lifecycle of technical risk: the portfolio companies haven’t proven their technologies work at scale, let alone produced exits. That Aum Ventures attracted international LP majorities at this stage, using Fund I’s reported performance data and Skyroot’s unicorn trajectory as evidence, suggests the earliest end of India’s deeptech stack is now legible to a class of global capital that previously required more maturity before committing.
What are the risks behind the 2.23x MOIC and 53% gross IRR figures Aum Ventures is reporting?
These are self-reported gross figures from a fund that has been investing for roughly two to three years. “Gross” means the returns are calculated before management fees and carried interest, which means net returns to limited partners are materially lower. More importantly, early-stage fund performance at this vintage is typically based on internal valuation marks — the fund’s own assessment of what its holdings are worth — rather than on cash actually returned to LPs. Independent analysts reviewing comparable India deeptech debut funds have noted that such early figures should be treated as leading indicators rather than settled track records. The one confirmed exit, Sharang Shakti’s acquisition by LAT Aerospace, is a real data point; the rest are marks.
What does international LP participation at India’s seed-stage deeptech funds signal for the future?
If the leading indicator holds — if Fund I produces realized returns in the range suggested by current marks — it opens a significantly larger door. International LPs that have validated the thesis at seed are structurally positioned to commit much larger capital to growth-stage Indian deeptech funds, a category that has not yet attracted international LP majorities at scale. The current moment looks, in structural terms, like the early period of US-India IT services investment in the 1990s: a proof-of-concept phase where early-stage validation by international capital precedes much larger flows once the return profile becomes undeniable.
What sectors does India Innovation Fund II target, and why those four?
The fund focuses on artificial intelligence, space technology, semiconductor design, and defense technology — sectors that share a common characteristic: their competitive moats come from proprietary intellectual property, not from distribution or scale alone. Each sector also benefits from government demand creation: ISM 2.0 is building domestic procurement for semiconductor design companies; IN-SPACe’s regulatory framework creates launch market access for space companies; and India’s defense modernization push creates domestic buyers for AI-led defense technology of the kind Sharang Shakti built. Founders with IP in these verticals face lower market risk than their peers in consumer technology, which makes early-stage technical risk more tractable to fund.
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