Together Fund Aims to Close $150M Fund-II by June, Focusing on AI Startups

Together eyes final close of Fund-II by June to up AI play

Venture capital firm Together Fund expects to close its $150 million Fund-II by June and ride India's artificial intelligence (AI) wave. Founded in 2021 by Freshworks founder Girish Mathrubootham and Eka Software founder Manav Garg, Together plans to focus on AI through its second fund and support 19-20 firms in the segment.Venture capital firm Together Fund, set up by Freshworks founder Girish Mathrubootham and Eka Software founder Manav Garg, is ramping up its focus on artificial intelligence (AI) companies and expects to make the final close of its $150-million Fund-II by June. It has made 31 investments across its two funds and will back another 19-20 startups in the AI segment from the second fund, Garg told ET. He said startups building in the applications layer from India are beginning to show revenue potential with several cross-border companies coming up from India and targeting the US, which is the biggest market for these services. He said that seven of Together Fund's portfolio companies are expected to close Series A rounds in the next four to six months. "Globally, AI software companies are reaching $100 million in revenue in two years. That's possible. What we look at is whether there's a high user adoption and stickiness or high revenue growth potential. There will be hype in the market but we have to focus on these metrics," Garg said. The firm was founded in 2021, with its maiden fund having an $85-million corpus. He also pointed out that India's strengths for building in AI lie in the applications layer, where startups as well as founders can leverage on the country's historical expertise of a large talent pool of operators and developers. There are broadly three layers in the AI stack -- the foundational models, horizontal layers called enablers and vertical AI applications. Together Fund picked up pace since mid-2024, when Mathrubootham stepped down as CEO of the Nasdaq-listed Freshworks and took on the role of the executive chairman. A month before he stepped down, Garg's Eka Software was acquired by private equity firm STG, following which he became an adviser to the company. In August 2024, Together Fund brought in Lakshmi Shankar, former vice president of search at Google, as a general partner to head its San Francisco office. Shankar joined Mathrubootham, Garg and former Matrix Partners India (now called Z47) executive Shubham Gupta as the firm's fourth partner. "We have an AI portfolio, which includes a gaming platform, startups working in healthcare, AI infrastructure, and a lot more. This is not very different from what's being built in the US as well. Girish and I are operators and we can see the trends and know how to build fast growing products in the Indian market," Garg said. Together Fund's portfolio companies include design copilot platform Thesys, Metaforms, which builds AI agents for market research, Composio, which integrates AI agents with large language models (LLMs) and generative AI gaming platform Chaotix. Garg highlighted that while the pace of investments in India is still slow in the AI segment, company formation has been ongoing. "Right now, we're seeing over 200 companies every month... so the underground activity has been ongoing, it's just that the investment activity has been slow. That's why you didn't see announcements from large funds doing big Series A rounds early on, when the US had already started investing big. We've been late in the global investment cycle," he said. According to Venture Intelligence, Indian AI startups raised $747 million in 2024, down 26% from 2023. However, the number of deals in the segment increased to 121 from 78.

Together Fund Looking To Mark Final Close Of Its $150 Mn Fund II By June

The firm's Fund II marked its first close in July 2023, having attracted interest from institutional investors in the US and Asia SaaS and AI-focussed venture capital firm Together Fund is reportedly aiming to mark the final close of its $150 Mn Fund II by June. The VC firm has made 31 investments across its two funds and is looking to back a new batch of 19-20 startups in the AI segment from the second fund, ET reported, citing Together Fund's cofounder and managing director Manav Garg. Inc42 has reached out to Garg for comments on the development. The story will be updated based on his response. Founded by Freshworks founder Mathrubootham, Eka Software founder Manav Garg, former Matrix Partners' Shubham Gupta, and former Accel executive Avinash Raghava, Together Fund is focussed on early-stage startups in SaaS and AI sectors. It announced an initial corpus of $85 Mn for SaaS startups. Till date, the investment firm has backed startups such as Jhana, RapidClaims, WorkHack, Zipstack, UiFlow, among others. Raghava left Together Fund to take up the role of CEO at SaaS collective SaaSBOOMi, in 2023. The firm's Fund II marked its first close in July 2023, having attracted interest from institutional investors in the US and Asia. The second fund invests between $1-$5 Mn in seed and Series A rounds of startups.