8i Ventures, an early-stage venture capital firm that has backed companies such as fintech unicorn Slice and cafe chain Blue Tokai, has launched a seed funding program ‘Origami’, allocating $10 million from its second fund of $50 million for investments.
Under the new program, the fund will invest between $250,000 to $2 million in pre-seed to early-revenue stage startups, across sectors. Startups can expect a response to their application in a week and a term sheet in 2 weeks, if selected, the firm said, adding that they aim to close deals within a month.
“Through this seed program we aim to invest in 8-10 startups this year, and if this initiative is well-received, we hope to double our allocation to $20 million,” said Vikram Chachra, founding partner of 8i Ventures.
Both late-stage and early-stage funding rounds have seen a significant downturn over the last year, with funding across tech startups crashing 72% year-on-year to $7 billion, Tracxn data showed.
Stage-wise, seed investment fell to $779 million last year from $1.8 billion in 2022 while early-stage funding stood at $2.4 billion, compared to $7.6 billion in the preceding year. Late-stage deals also crashed to $5.1 billion from $16.2 billion in 2022.
“From our perspective, there is no funding winter,” Chachra said, adding that this is probably the most opportune time for startup founders. “Some of the most successful startups have been created in the deepest of funding winters. Uber, Airbnb and Whatsapp were all incorporated during the great financial crisis of 2008.”
The firm, founded in 2019 by Vikram Chachra and Vishwanath V, had made the first close of its second fund in November 2022, raising $25 million largely from family offices like Salgaocars and Kothari (DSP) who were also invested in 8i Venture’s first fund. The final close was made in March 2023.
The average cheque size from the second fund is between $1.5-2 million, going up to $10 million across subsequent rounds, it had said. Besides consumer payments and commerce, the second fund also focuses on B2B payment startups.
As for its first fund of $15.5 million, it had increased 270% with a 100% IRR in 3 years, with 27% of the capital already returned to its investors.