Early-stage venture capital firm TDV Partners is looking to maintain a steady deployment pace from its second fund, even as it sharpens its focus on consumer-facing businesses and early founder engagement. The firm announced its Rs 50-crore second corpus in October 2024 and has already backed seven startups from the fund. Founder and general partner Ujwal Sutaria spoke to S Shanthi about investment priorities, the role of AI in deal-making, and lessons from missed bets. Excerpts:
Q. What are the startup sectors you are looking at for your upcoming investments?
A. Our core focus is consumer and B2C businesses. We broadly break this into consumer tech, consumer AI, and what we call consumer upgrade. About 80% of our capital is deployed across these themes, while the remaining 20% is kept opportunistic for exceptional founders. We typically invest at the pre-seed stage and are often the first institutional investor. We usually lead rounds in the $500,000 to $1 million range, sometimes even before there is a product or revenue. In some cases, we engage with founders at a very early stage, when they are still employed elsewhere and only exploring an idea, and come in once they are ready to start up.
Q. How many investments do you plan to make by the end of FY26 and in FY27?
A. We have made around eight investments so far this financial year and have two more term sheets in place. That should take us to about 10 investments by the end of FY26. We expect to maintain a similar pace next year, with around 10 to 12 investments in FY27. From our first fund of Rs 25 crore, we invested in about 30 companies. From Fund II, which is Rs 50 crore, we have already invested in seven companies, with three more in the pipeline.
Q. How are you leveraging AI in everyday deal-making decisions?
A. AI is helping us optimise our sourcing funnel and reduce turnaround time. We use multiple tools for faster screening and initial evaluation of opportunities. Internally, we are also working on a new initiative that we believe can meaningfully improve efficiency in early-stage investing, though it is still under development.
Q. Which emerging technologies could create the next wave of venture-scale companies?
A. On the consumer side, we see strong potential in AI-native products that deliver personalised experiences across areas like commerce, finance, and wellness. Proprietary data and user trust are likely to be key moats. At the same time, there is significant opportunity in infrastructure layers that simplify model fine-tuning, deployment, and governance across hybrid environments. In our view, companies that quietly solve difficult infrastructure problems in the AI value chain are the ones most likely to scale meaningfully.
Q. What are some of TDV’s anti-portfolio companies?
A. One would clearly be the quick commerce company Zepto. We saw it early but did not believe there would be demand for 10-minute delivery. In hindsight, that assessment was clearly wrong. Zepto helped create an entirely new consumer tech category. Another company would be Seekho. I saw it early but underestimated how quickly micro-content and short-format learning could scale.
Q. Tell us about your hiring plans for next year.
A. We are not planning any major expansion on the hiring front. The focus is on disciplined execution. Our portfolio currently has over 40 companies and should grow to about 50–55 over the next year. The priority is to work closely with founders, support them on product and strategy, and help them raise their next round of capital.
Q. What investment trends look favourable right now?
A. Consumer-focused startups continue to show strong momentum, particularly where AI is enabling better user experiences. Consumer AI tools that personalise, automate, or act as intelligent co-pilots are gaining traction. There is also growing interest in consumer upgrades across education, wellness, and lifestyle, where technology can materially improve everyday outcomes.