Yali Capital closes Rs 893 cr deeptech fund, eyes 8 portfolio firms by year-end

BENGALURU: Bengaluru-based Yali Capital has closed its debut deep tech-focused fund at Rs 893 crore (about $104 million), exceeding its original Rs 500 crore target and Rs 310 crore greenshoe option. The Sebi-registered Category II AIF plans to deploy the fund across early-stage and late-stage investments in sectors such as semiconductors, AI, robotics, aerospace and smart manufacturing.Founding Managing Partner Ganapathy Subramaniam told TOI that the fundraise was completed entirely through word-of-mouth, without any bankers or distributors. “Nearly 78% of our capital has come from India – entrepreneurs, family offices, fund-of-funds like Sidbi’s FFS and Self-Reliant India Fund, and corporate backers including Infosys and Qualcomm,” he said. The fund’s leadership team also committed Rs 15 crore each to the vehicle.Yali Capital operates through a dual structure comprising a Sebi-registered AIF and a GIFT City-based feeder vehicle to attract global capital. The firm has already backed five startups and plans to invest in three more by the end of the year. The average cheque size ranges from $2 million to $10 million, with ownership targets varying from 20% at seed stage to as low as 5% in late-stage deals.The fund will allocate 70% of capital to early-stage bets and the remaining 30% to growth-stage investments, primarily in companies at Series D and beyond. “Of the early-stage capital, about 45% will go into first institutional rounds and 25% into follow-ons,” Subramaniam said, adding that the fund will not participate in secondary transactions.Subramaniam, who has previously led and backed deep tech companies such as Cosmic Circuits, IdeaForge and Tonbo Imaging, said the team brings strong operator experience and intends to work closely with founders. “Today alone, two of our portfolio startups spent three hours each with us. We’re not just capital providers, we want to help execute the vision,” he said.While Yali’s early-stage focus will be on experienced or university-affiliated founders in deep tech, the late-stage strategy leans heavily on partner Mathew Cyriac’s track record of taking companies like MTAR Technologies and Data Patterns public. “India has several deep tech firms doing hundreds of crores in revenue but struggling to scale. We want to come in, back them with capital and execution, and take them public,” Subramaniam said.Asked about sectoral depth, he flagged manufacturing, robotics, and chip design as areas with strong founder readiness. “India is the world’s second-largest chip design talent pool. The challenge is converting that into product companies that can compete globally,” he said. The firm expects to announce a large investment in the chip design space in the coming weeks.While India’s domestic deep tech market remains early, Subramaniam said the LP response and founder momentum point to a long-term inflection. “The ecosystem is maturing. There’s plenty of pipeline. Now it’s about patient capital and execution.”