Advanced manufacturing-focused venture capital firm A99 (formerly Artha99) is gearing up to raise its third fund with a target corpus of $100 million (Rs 850 crore), Founder and Managing Partner Vignesh Shankar said. 

The firm has already secured soft commitments worth $30 million and plans to begin active fundraising in the coming months. A99 expects to start deploying Fund III from April 2026, backing early-stage startups across pre-Series A to pre-Series B stages with investment cheques in the range of Rs 20 crore to Rs 80 crore.

In line with other niche venture firms, A99 is also allocating a portion of its fund for follow-on rounds. Around 20% of the corpus will be reserved for follow-on investments, while the remaining 80% will go towards fresh deals, Shankar noted.

The Chennai-based firm is no stranger to the investment landscape, having started with a $1 million fund back in February 2021, directly from Shankar’s pocket while he was working at Stanley Black & Decker. In 2021, Shankar quit his corporate stint and took up investing full-time, setting up the Sebi-registered fund A99. In 2022, the firm launched Fund II, which had an initial target corpus of Rs 50 crore. But due to high interest, the firm had to exercise the greenshoe option. This saw its Fund II have a total corpus of around Rs 105 crore. “We identified four pillars or four strategic poles where we want to invest in,” Shankar said.

He said the four pillars of A99’s strategy includes IP- or R&D-driven manufacturing, the shovel strategy (backing enablers rather than direct players), supporting companies driving digitisation in Indian manufacturing, and investing in infrastructure along with infrastructure-led ancillaries.

A99 has made one exit from its Fund I portfolio—Helsinki-based application development software provider, Futurice UK, which is a subsidiary of Futurice Finland. The firm had acquired A99’s shares which saw the VC firm cash in 7X returns.  

It is currently waiting for some of its other portfolio companies to raise follow-on rounds to sketch their exit route. Some of the firm’s portfolio companies include EV-maker Raptee, rare earth-magnet free motor maker Aditya Avartan Technologies, and chemical solutions provider Innocule, among others.  

Despite having made investments outside India in the past, A99 is no longer actively looking to invest in companies abroad. “I don't see too many manufacturing startup founders going abroad and setting up operations. So, I think India will drive this space and it's (investments) all going to be in India. Unless something is phenomenally good, as a strategy, we don't want to look outside,” Shankar added.