The fund expects to receive Securities and Exchange Board of India (Sebi) approval by January or February, and is in talks with potential limited partners across overseas and domestic markets to set up the maiden vehicle, the first person mentioned above said on condition of anonymity.

“The fund will invest across sectors including healthcare, technology, deep tech, AI, fintech and consumer brands,” said the first person aware of the fundraising plans.

The second person aware of the fund’s operations stated that approximately 80% of the corpus will be deployed in technology startups over the fund’s life, with the remaining 20% earmarked for consumer goods and tangible D2C brands.

“The fund plans to make 10-15 investments a year, with cheque sizes in the range of ₹75 lakh to ₹1 crore per deal. We will focus on seed to Series A rounds, and only consider post-revenue companies,” this person added.

The fund has already secured commitments of around $20 million from its promoter, including from managing partner Chahat Agarwal, according to the second person cited above, who requested anonymity.

“The rest of the capital will come from foreign limited partners; as of now, the fund is not looking at domestic LPs,” the person said.

When contacted by Mint, a spokesperson for the firm declined to comment on the story.

Sector mix

A Square Capital is structured as an Indian fund and headquartered in Delhi. Founded by Chahat Agarwal, a marketing and brand professional who worked on Oyo’s expansion in the UK and Southeast Asia, A Square Capital will be sector-agnostic, with an emphasis on healthcare and consumer brands, according to the two people familiar with the plans.

Healthcare will be a key focus area, with the fund bringing in domain expertise spanning private care, policy and government systems, the first person said.

Key Takeaways

A Square Capital, a new domestic VC, is launching its first fund, targeting $40 million and has applied for a Category I AIF licence from Sebi.
The fund will allocate 80% of its corpus to technology, deep tech, AI, and fintech startups, with the remaining 20% for consumer/D2C brands.
The fund will target seed to Series A rounds in post-revenue companies, planning 10-15 investments per year with cheque sizes between ₹75 lakh and ₹1 crore.
$20 million is already committed by the promoter, with the remaining capital expected to come exclusively from foreign Limited Partners.
A Square Capital positions itself as offering end-to-end support to founders—including fundraising, go-to-market strategy, product development, and scaling—going beyond typical investor/accelerator offerings.

Until the licence is in place, Agarwal has been making personal investments. “While we are awaiting the Sebi licence…Chahat is investing as an individual for now, until we get the fund licence,” the first person added.

Beyond healthcare, the fund will look at technology-led opportunities and remain largely sector-agnostic, the first person confirmed.

According to the two people aware of the plans quoted earlier, beyond providing capital, the fund intends to offer end-to-end support to founders, including go-to-market strategy, product development, scaling, and access to a vetted advisory and investor network, working alongside teams from idea validation through fundraising and scale-up.

“The offering includes fundraising support, go-to-market strategy, product development and scaling…positioned as going beyond what traditional accelerators or investors typically provide,” said the first person.

Early-stage venture firms have stayed active in India over the past year, announcing new funds and first closes across seed and Series A strategies. Recent vehicles include Blume Ventures’ Fund V first close, alongside fresh funds from Prime Venture Partners and 247VC.

Market growth

Blume Ventures recently marked the initial close of its fifth fund at $175 million, with a planned final close of $250–275 million by early 2026. In March, Prime Venture Partners launched a $100 million Fund V, with over 80% of commitments secured. It has begun deploying funds in the second half of 2025 to companies such as Nivasa Finance, Klaar, Illumine, and Metafin, among others.

Among micro VC entrants, 247VC launched India Fund I in May with a ₹200 crore corpus and a ₹50 crore greenshoe option (targeting ₹250 crore), registered as a Category II AIF to lead seed rounds with follow-on capital.

According to Inc42’s Indian Tech Startup Funding Report Q3 2025, India has already seen more fund launches this year than in the whole of 2024. In the first nine months of 2025, investors announced funds worth over $9 billion, surpassing the $8.7 billion tally for 2024.

The third quarter alone accounted for more than $2.5 billion in new funds across 25 investors, with 17 vehicles specifically targeting early-stage startups, according to the report. The report also showed that in 2025, nearly 60% of new fund launches were aimed at seed and Series A rounds, showcasing a clear tilt toward early-stage deals.