New fund · Professional & Local Services

Sparrow Capital closes Rs 475 crore third fund to back early-stage startups

What they do

Sparrow Capital is an early-stage, sector-agnostic venture capital firm based in Bengaluru

It has closed its third fund at Rs 475 crore, the largest investment vehicle in its history

The fund will be used to invest in 25 to 30 startups over the next three years with initial cheques of $1 million to $2 million

Sparrow Capital, an early-stage, sector-agnostic venture capital firm, has closed its third fund at Rs 475 crore, the largest investment vehicle in its history.
The firm plans to invest in 25 to 30 startups over the next three years with initial cheques of $1 million to $2 million.
It has already made five investments from the new fund.
The fund is significantly larger than Sparrow’s Rs 120 crore second fund, which backed 27 startups with cheques of $300,000 to $500,000.
The increased capital base will allow the firm to lead or co-lead more seed-stage funding rounds.
The firm will continue its sector-agnostic investment strategy, focusing on areas such as consumer technology, fintech, and AI-native software.
It plans to reserve 30% to 40% of the fund for follow-on investments to support high-performing portfolio companies through subsequent funding rounds.

The new fund marks a shift in Sparrow’s investor base, with 60% of the corpus raised from global endowments, foundations, funds of funds, and family offices.
The remaining capital came from startup founders, operators, Indian family offices, and high-net-worth individuals (HNIs).
This represents a notable evolution from earlier funds, which were predominantly backed by non-institutional investors.

Sparrow Capital is an early-stage venture capital firm based in Bengaluru, India.
It focuses on investing in startups across various sectors, including consumer technology, fintech, and AI-native software.
The firm has invested in more than 40 startups since its inception.
Its portfolio includes companies such as GoKwik, ApnaMart, Deconstruct, E6data, Gushwork, Furnishka, Aukera, StrainX, Superhealth, Homerun, and Optimist.
Several startups from its first fund have reached a stage of maturity that could generate liquidity opportunities over the next two to three years.

Sparrow Capital plans to invest in 25 to 30 startups over the next three years with initial cheques of $1 million to $2 million.
It will continue its sector-agnostic investment strategy, focusing on areas such as consumer technology, fintech, and AI-native software.

global endowments, foundations, funds of funds, and family offices (investor) — About 60% of the fund’s corpus has been raised from these sources.
startup founders, operators, Indian family offices, and high-net-worth individuals (HNIs) (investor) — The remaining 40% of the fund’s corpus has been raised from these sources.