Pavestone, a Hyderabad-based venture capital firm, recently completed the final closing of its Pavestone Technology Fund, securing a corpus of Rs 816 crore.
Initially, the firm aimed to raise Rs 600 crore but expanded its goal twice with the green shoe option, eventually targeting Rs 900 crore.
With this fund, Pavestone intends to support 14-15 early growth-stage B2B technology companies, providing each with an investment between $5-10 million.
Key investors in the fund include the Self-Reliant India (SRI) Fund, Mankind Pharma’s family office, and Colruyt Group India.
“The fundamental thesis of the fund is that we want to focus on enterprise technology, specifically companies that solve problems for large and public enterprises in the B2B space. That’s about 80% of our fund,” V Laxmikanth, managing partner at Pavestone, said.
“The remaining 20% is invested in what we call moonshot or frontier technologies, which involve cutting-edge engineering or scientific innovation,” he said.
Though the fund is open to various sectors, it focuses on generative AI, cloud computing, immersive reality, advanced connectivity, and innovative engineering fields like mobility, material science, bioengineering, and space. It also aligns with long-term trends in digitalization, ESG, and global supply chain realignment.
So far, Pavestone’s managing partners, Laxmikanth, Sridhar Rampalli, and Srikanth Tanikella, have funded five companies through this fund, including no-code AI platform E42, in-space propulsion startup Bellatrix Aerospace, decarbonization platform LivNSense, defense startup NewSpace Research & Technologies, and visual robotics platform Cynlr.
“I think what we discussed from a strategy perspective was right. People like that strategy. And this strategy is not about investing in the flavour of the season; it’s about investing in companies that will build real-world businesses,” Laxmikanth said, highlighting the response from its investors.
“What we believe is that we need to use time-tested investing principles, which means conducting rigorous analysis, having strong risk management, and ensuring impeccable governance. These should be the cornerstones of any fund,” he added.
