gradCapital launches second fund, sized at $6 million

Student-startup focused venture capital (VC) firm gradCapital on Friday launched its second fund with a size of $6 million. The VC invests standard cheque sizes of $40,000 in exchange for 4% equity, as per a statement.

The fund’s investors include CIIE, a startup incubator established by IIM–Ahmedabad, Blue Jeans Network co-founder Alagu Periyannan, Nearbuy.com founder Ankur Warikoo and Inventus Capital Partners co-founder and managing director Kanwal Rekhi, as per a statement.

Funded students get to be part of a four-week cohort in Bengaluru, where they meet startup entrepreneurs, such as Ather Energy co-founder Tarun Mehta, Razorpay founder Shashank Kumar, and Zerodha chief technology officer Kailash Nadh.


gradCapital, founded by BITS Pilani and IIM Ahmedabad alumni Abhishek Sethi and Prateek Behera, gets around 3,000 applications a year and ends up funding around 20, the statement added.

“It’s a systemic failure when ambitious students aren’t able to take off while in college, and they end up taking a job because of a loan and become too rational. After which, they are more likely to start a D2C company instead of a quantum computer, and we need more of the latter,” Sethi said in the statement.

Building a future
Sethi said that the fund is not in the business of finding and investing in deals, but instead focuses on making students more ambitious and building a future, despite having a challenging education system.

gradCapital prefers funding teams that have started companies from projects, especially science and engineering projects, the statement added.

Beyond the fund, the firm has also launched a grant programme, Atomic Fellowship, where it will distribute $5,000 grants to students with technical projects that have the potential of becoming companies. The programme is supported by the Peter Thiel-backed Emergent Ventures and will be co-run by Kshitij Khandelwal, co-founder and chief technology officer of spacetech startup Pixxel.

In 2021, gradCapital was started by Sethi and Behera in an IIM-A dorm room.

The VC firm had then raised a $1 million fund to deploy into 18 companies. The first fund is running at about 2x its initial value, within 18 months, the statement added.