Arkam Ventures Expands Focus to Include Electric Vehicles and Manufacturing
Arkam Ventures, a digital tech-focused venture capital firm, has announced that it will be expanding its areas of focus for its second fund. In addition to its existing focus on fintech, skilling, software-as-a-service, logistics, and food agriculture, Arkam Ventures will now include electric vehicles (EVs) and manufacturing. The decision to include these sectors was driven by the urgent need to address important themes in these areas.
According to Bala Srinivasa, the managing director at Arkam Ventures, the second fund has a multi-fund thesis and aims to connect sectors through the digitization thesis. By adding manufacturing and EVs to its portfolio, Arkam Ventures hopes to tap into the growing demand for transparency, visibility, and higher quality in these industries.
Arkam Ventures launched its $180 million second fund last year and is currently in the process of closing the fundraising for this fund. The firm has already made its first investment in the manufacturing space by jointly leading a $6.3 million Series A funding round in custom manufacturing platform Karkhana.io.
Arkam Ventures Launches $180 Million Fund with Multi-Fund Thesis
Arkam Ventures’ second fund, with a size of $180 million, has a multi-fund thesis that aims to connect various sectors through the digitization thesis. The fund will focus on sectors such as fintech, skilling, software-as-a-service, logistics, food agriculture, and now, electric vehicles and manufacturing.
The decision to expand its focus comes as a result of the urgent themes that need attention in the areas of manufacturing and EVs. By investing in these sectors, Arkam Ventures aims to drive digitization and bring transparency, visibility, and higher quality to these industries.
Arkam Ventures Makes First Investment in Manufacturing Space
Arkam Ventures has marked its first investment in the manufacturing space by leading a $6.3 million Series A funding round in custom manufacturing platform Karkhana.io. The funding round was done in collaboration with Susquehanna Asia Venture Capital.
Karkhana.io offers solutions for contract manufacturing in areas such as product assembly and product localization. The platform aims to leverage technology to bring more transparency, visibility, and higher quality to the manufacturing process.
Bala Srinivasa, managing director at Arkam Ventures, stated that the decision to invest in Karkhana.io was driven by the need for more transparency and higher quality in the manufacturing industry. The funding for this investment came from Arkam’s first fund.
Manufacturing Startups Face Challenges but Find Opportunity in India
According to Bala Srinivasa, manufacturing startups face challenges such as long gestation periods and barriers to entry. However, these startups have the potential for higher customer stickiness compared to other types of tech startups.
Srinivasa believes that the environment is right for manufacturing startups in India, as investors are showing interest and there are favorable tailwinds such as rising domestic demand and the “China Plus One” strategy. The strategy encourages companies to diversify their sourcing countries to reduce dependency on China.
He emphasized the importance of small Indian businesses becoming large manufacturing enterprises to keep up with the growing demand. Srinivasa highlighted that digital platforms play a crucial role in helping small businesses in manufacturing overcome challenges related to sourcing of demand, capital, and capacity utilization.
Digital Platforms Address Challenges for Small Manufacturing Businesses
Small businesses in manufacturing face challenges related to the sourcing of demand, capital, and capacity utilization. Bala Srinivasa noted that the average factory in India has 30-40% unused capacity due to the demand-supply disconnect.
Digital platforms have the potential to address these challenges by providing small businesses with newer ways to satisfy the surge in demand. These platforms enable businesses to find and connect with potential customers, access capital, and optimize their capacity utilization.
By leveraging technology and digital platforms, small manufacturing businesses can improve their efficiency, productivity, and profitability. Arkam Ventures recognizes the importance of these platforms in driving the growth of the manufacturing sector in India and aims to support startups in this space through its investments and expertise.
Analyst comment
Positive:
– Arkam Ventures expanding its areas of focus to include electric vehicles and manufacturing shows the company’s forward-thinking approach and willingness to adapt to emerging industries.
– The launch of a $180 million fund with a multi-fund thesis indicates Arkam Ventures’ confidence in the potential of various sectors and their commitment to driving digitization and improving transparency in these industries.
– Arkam Ventures’ first investment in the manufacturing space demonstrates their belief in the growth potential of the sector and their commitment to supporting innovative startups.
Neutral:
– Bala Srinivasa highlighting the challenges faced by manufacturing startups in India and the need for small businesses to become large manufacturing enterprises reflects the current state of the industry and the areas that need improvement.
– The recognition of digital platforms as solutions to challenges in the manufacturing industry is a common understanding and not unique to Arkam Ventures.
Short analysis:
The expansion of Arkam Ventures’ focus to include electric vehicles and manufacturing, along with their launch of a $180 million fund, indicates confidence in the potential of these sectors. Their first investment in the manufacturing space shows a commitment to supporting innovative startups. The challenges faced by manufacturing startups in India can be addressed through the use of technology and digital platforms. Overall, the market for electric vehicles and manufacturing is expected to grow, driven by the demand for transparency, visibility, and higher quality.
