Hyderabad-based angel investment firm Hyderabad Angels Fund is sharpening its focus on generative AI, spacetech and deeptech as it steps up deployments from its debut fund amid a shift in the startup funding environment towards fundamentals and execution.
The firm launched its first fund in 2023, a Rs 100 crore vehicle with a Rs 50 crore green-shoe option, and is looking to back startups at what it describes as a critical inflexion point of growth — companies that have moved from zero to one and are preparing to scale from one to ten. Some of its notable investments so far include STAN, Dhruva Space and Bamboobox AI.
Focus on engineering led deeptech bets
Rathnakar Samavedam, investment director and managing partner at Hyderabad Angels Fund, in an interaction with Fe, said the firm has deployed about Rs 8–12 crore from the current fund, including active commitments. He said the fund is particularly bullish on sectors where engineering talent intersects with real-world use cases. Apart from generative AI, spacetech, manufacturing-led deeptech and drones, the firm continues to track healthtech, fintech and sustainability-focused startups, with an emphasis on solving core infrastructure problems rather than adding a thin digital layer.
In the current financial year, FY26, the firm has closed or committed to four to five new investments and has several deals in advanced stages of due diligence. The fund is primarily targeting Series A and Series B opportunities backed by established domestic venture capital firms with a long operating track record in India.
Plans 12-15 startup portfolio
Hyderabad Angels Fund plans to build a concentrated portfolio of 12–15 startups from the fund. Samavedam said around four to five deals are expected to be completed by the end of FY26, with the remaining capital to be deployed through FY27 and FY28, including follow-on investments in stronger-performing portfolio companies.
He said a key positive trend in the investment landscape is the renewed emphasis on unit economics and profitability, as investors move away from growth-at-any-cost strategies. At the same time, the firm is cautious on crowded segments such as quick commerce, generic B2B SaaS and “AI-wrapper” startups that lack proprietary data or defensible intellectual property.
On exits, Samavedam said the IPO market has matured and is increasingly open to technology companies with predictable revenues and profits, making public listings a viable liquidity option for startups with revenues above Rs 500 crore.