Ideaspring Capital: Building India's Deep Tech Ecosystem From Bangalore

I. Introduction & Episode Roadmap

The monsoon of 2022 was particularly unforgiving in Bengaluru. Streets flooded, startups scrambled to keep their servers dry, and venture capitalists postponed meetings. But inside a modest office in Jayanagar, Naganand Doraswamy, then 56, was closing what would become the most significant fundraise of his second act: the final tranche of Ideaspring Capital's second fund.

This wasn't supposed to be his story. At 45, after selling his telecommunications startup Span Systems to a Norwegian acquirer, most entrepreneurs would have settled into advisory roles or angel investing. At that time he realised it's hard to do one more startup. He thought the next best thing is a fund, because you're still very close to the entrepreneur ecosystem which he had been part of for so long.

Naganand Doraswamy is the Founder and serves as Managing Partner and Investment Committee Member at Ideaspring Capital. But calling him just another VC misses the point entirely. This is the story of how a serial entrepreneur who'd already built and sold three B2B companies decided, at an age when most slow down, to build something far more ambitious: India's premier deep tech venture fund.

The central question isn't whether India can produce world-class enterprise technology companies—Naganand had already proven that with PhotonEx, Lexar Networks, and Span. The question is whether patient capital, married with operational expertise, can transform India from a services powerhouse into a product innovation hub. Money without mentoring and mentoring without money, both are useless, Naganand would say, crystallizing a philosophy that would guide everything that followed.

What emerges from this narrative isn't just another fund story. It's a blueprint for how operator-investors can bridge the gap between India's engineering talent and global enterprise markets. It's about why Ideaspring's second fund will not go beyond Rs 300 crore in size, as anything above this we do not know how to give back the returns to our investors—a refreshing admission of limits in an industry drunk on scale.

Over the next several hours, we'll explore how a computer science graduate from UVCE Bangalore built three startups, experienced both spectacular failures and exits, then channeled those lessons into a venture firm that's returned capital to LPs while others chase unicorns. We'll examine why B2B enterprise technology, the unsexy cousin of consumer internet, became Ideaspring's obsession. And we'll understand why, in an ecosystem awash with capital, sometimes the most radical thing you can do is stay small, stay focused, and actually return money.

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II. Origins: The Naganand Doraswamy Story

Picture Virginia Tech in 1989. The Cold War was ending, the internet was still ARPANET to most people, and a young engineer from Bangalore was writing what would become some of the earliest implementations of IP security for Windows 95. Naganand has a Master's in Computer Science from Virginia Polytechnic and State University & Bachelor's in Computer Science from U.V.C.E, Bangalore, India.

The journey from UVCE Bangalore to Virginia Tech wasn't just geographical—it was a transition from India's engineering-focused education system to America's product-building ethos. After his Master's, he moved up to Boston and joined FTP Software where he wrote the first implementation of IP security of Windows 95. Think about that timing: this was before most people knew what internet security meant, let alone needed it.

Then he was with Bay Networks where he was working in the architecture lab working on the next generation of internet architectures. They also developed the core router for Bay Networks. These weren't just jobs; they were front-row seats to the infrastructure revolution that would define the next three decades.

Then came 1999, and everything changed. He was a founding member of a startup that was building a 1.6 terabit long-haul optical transmission system. That was PhotonEx. It was a lot of fun. They had 15 PhD's from MIT working on the optics side and a bunch of engineers working on the engineering side. It was a great learning experience.

But PhotonEx taught Naganand something crucial about timing and market readiness. Unfortunately, that company closed down as it couldn't survive the nuclear winter. The dot-com crash of 2001 wasn't just numbers on a screen—it was brilliant engineers watching their breakthrough technology become irrelevant overnight because the market vanished.

Undeterred, Naganand co-founded Lexar Networks in 2004, focusing on fixed-mobile convergence. They tried building a startup in the fixed-mobile convergence (FMC) space, but couldn't get funding. Another technical success, another market failure. The pattern was becoming clear: great technology without market timing and patient capital was just expensive R&D.

It was pretty disheartening, and that is one of the reasons he moved to India in 2005 and joined Span full-time. Span Systems would become his redemption arc. Building from India for global markets, the company found its rhythm in the telecom domain. The persistence paid off: He tasted success at the age of 45 when Span was bought by a Norwegian company.

But success at 45 posed a different problem. Throughout all those years he participated in architecture meetings and noticed how the business aspects took more importance in the execution of a strategy. Then the realization set in; having knowledge of technology is good but if you really want to scale you have to be a tech-cum-business guy.

This realization would shape everything that came next. In his illustrious career, he has worked with PhotonEx, Nortel Networks, Bay Networks, and FTP Software. Each stop added layers to his understanding: technical architecture at Bay Networks, product-market fit challenges at PhotonEx, fundraising struggles at Lexar, and finally, successful scaling and exit at Span.

The entrepreneurial journey wasn't his only contribution to the ecosystem. A thought leader in his field, he co-authored a book on IPSecurity and served as President of TiE Bangalore. He is an active member of committees at NASSCOM, FICCI, and the Government of Karnataka, focusing on entrepreneurship and investment policies.

By 2016, Naganand had a choice. He could start another company, become a full-time angel investor, or try something different. What he saw in the Indian startup ecosystem frustrated him. When Ideaspring was founded in 2016, B2C startups were attracting most of the investment inflow while B2B startups received little support.

The observation that would birth Ideaspring was deceptively simple: B2C startups are initially operationally intensive and later become tech-intensive, but it is the opposite for B2B startups. B2B companies needed deep technical expertise and patient capital upfront, with operational scaling coming later. The entire Indian venture ecosystem had this backwards.

At 50, when most successful entrepreneurs are writing checks and giving advice from a distance, Naganand decided to build an institution. Not just another fund, but a bridge between his hard-won operational expertise and the next generation of Indian product companies. The entrepreneur was about to become an investor, but he would never stop being an operator.

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III. The 2016 Founding: Why Start Ideaspring?

The Bengaluru startup ecosystem of 2016 was intoxicating. Flipkart was valued at $15 billion, Ola was battling Uber, and everyone wanted to build the next consumer internet unicorn. Walk into any cafe in Koramangala, and you'd hear pitches for the "Uber for X" or the "Amazon of Y." B2B enterprise software? That was for the boring companies in Whitefield—the Wipros and Infosyses of the world.

Naganand saw it differently. His goal when he started fund one was to focus on products from India, because his experience in the US was products and that's what he did in India. But the timing seemed almost contrarian. While Tiger Global was writing $100 million checks to consumer startups, Naganand was thinking about enterprise software companies that might need 18 months just to close their first customer.

Global MNCs were establishing numerous technology centres in India, which had the potential to fuel entrepreneurship to build innovative software which can be primarily used by large enterprise clients. This wasn't speculative—it was happening. Google, Microsoft, and Amazon weren't just hiring in India; they were building core products. The talent that would normally stay at these companies for decades was starting to get restless.

The philosophical foundation of Ideaspring crystallized around a simple but profound insight: India had world-class engineers but almost no product managers with global experience. The venture capital available was either too small (angel investors) or too large and impatient (growth funds). There was nothing in between for deep tech B2B startups.

The initial fund design reflected this reality. It started in 2016 with a fund size of Rs 118 crore—investing in 16 startups. The math was deliberate: Rs 3.5 crore initial investments in 15 companies, with Rs 50 crore reserved for follow-ons in the winners. No spray and pray, no FOMO-driven investing.

Building the founding team was crucial. Arihant Patni (Managing Director) and Suryaprakash Konanuru (CTO) joined as partners. Arihant brought investing experience from his big data fund Hive, while Suryaprakash—"Suri" to everyone—brought deep technical expertise. This wasn't a team of ex-investment bankers learning about technology; these were operators who'd built and scaled products.

But the most radical element of Ideaspring's design was physical space. The fund actually included office space for portfolio companies for their first 18 months. The logic was counterintuitive but clear: B2B startups have to not just build the product, but also talk to potential customers, receive feedback, ensure the right messaging etc. Having them physically close meant problems could be solved over coffee, not quarterly board meetings.

The external validation came from an unexpected source. Mohandas Pai, MD of Aarin Capital, who is the General Partner in Ideaspring Capital, saw the vision clearly: As investors, we see a clear space for technology that is scalable. This is a deep technology focus fund.

The Investment Committee structure revealed another differentiator. Instead of partners making unilateral decisions, Ideaspring assembled external experts: Sanjay Anandram, Ravi Gururaj, and Sharad Sharma—each a successful entrepreneur-turned-investor. This wasn't about reducing risk through consensus; it was about pattern recognition from people who'd actually built companies.

Before Span Infotech, Naganand had started two more companies that did not take off. But he had immense learnings from their closure. He decided to start a fund after talking to several players in the ecosystem. Those failures weren't hidden; they were the qualification. Who better to help entrepreneurs navigate the valley of death than someone who'd crossed it multiple times?

The core insight was deceptively simple but revolutionary in practice. Most funds focus on B2B or B2C strategies. But we are going to fund product companies. Not services companies pretending to build products. Not B2C companies with enterprise divisions. Pure product companies with defensible IP.

The market opportunity was massive but required patience. India's IT services industry was worth hundreds of billions, but product companies from India had barely scratched the surface. The ideas can range from machine learning to big data engineering—technologies that were just becoming commercially viable in 2016.

As 2016 ended, Ideaspring had made its first few investments. The experiment was underway: could patient capital plus operational expertise plus physical proximity create a new model for building B2B companies from India? The entire Bangalore ecosystem was watching, skeptical but curious. After all, if anyone could pull this off, it might just be the entrepreneur who'd already done it three times himself.

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IV. Fund I: The Learning Phase (2016-2022)

The first Ideaspring portfolio company walked into their allocated space in early 2017 carrying little more than laptops and a prototype that barely worked. Eighteen months later, they walked out with $2 million in ARR and a Series A term sheet. This wasn't luck—it was the model working exactly as designed.

The fund started with Rs 118 crore, investing in 16 startups. The portfolio reads like a who's who of Indian enterprise technology: Lavelle Networks reimagining SD-WAN, SimYog building cognitive automation, Nimesa creating backup solutions for the cloud era. Each name represents a bet that Indian engineers could build products that compete globally, not just implement solutions others designed.

The investment thesis was precise, almost surgical. Ideaspring invests in only those startups which have proof of concept or have an ongoing pilot project, and show the potential of earning $500,000-700,000 in revenue within a year of operation. Its investment thesis requires startups to have a strategy in place to reach $8-10 million in revenue in four to seven years post-investment.

But the real education came from the exits. It had successfully exited from Whodat, Zapty, Spanugo, and Numocity. Each exit told a different story. Whodat's augmented reality platform found a buyer who valued its markerless technology. Zapty's consumer app pivot led to an acqui-hire. But Numocity—that was the validation that changed everything.

The Numocity story deserves its own examination. Founded as an EV charging infrastructure play, the company built a platform at the intersection of automobile, electric energy, and digital technologies. The startup had raised an undisclosed amount from Ideaspring Capital, Rebright Partners and ABB Technology Ventures (ATV) in January 2020. Two years later, ABB increased its shareholding in Numocity to 72% from 7% earlier, and gained the right to become its sole owner by 2026.

According to Naganand, Numocity, which was acquired by ABB Sweden, gave them a 10X return. In a market where most funds never return capital, Ideaspring had hit a home run in their first fund. But Naganand's reaction was telling: no victory laps, no press releases about unicorn potential. Just quiet satisfaction that the model worked.

The operational involvement wasn't just advice over coffee. Naganand calls his entrepreneurs every week and talks to them very often, particularly in the first 18 months. We are very close to them, know all issues so in the monthly meeting there are no surprises. This wasn't micromanagement; it was pattern recognition in real-time.

The fund's performance spoke volumes: They had already given 40% total fund return, thanks to Numocity Technology's exit. The VC firm has already returned 40% of the capital raised from the first fund. According to Naganand, Ideaspring Capital is targeting a minimum return of 2X from the first fund, with the potential to generate 5X returns.

The portfolio construction revealed deeper insights. The average ticket size from the first fund was about Rs 8-9 crore, but the variation was intentional. Some companies needed more capital upfront for R&D, others needed less money but more hands-on help with customer acquisition. The cookie-cutter approach of most funds simply didn't work for deep tech.

One portfolio company CEO recalled a 2 AM call with Naganand about a critical customer negotiation. "He didn't just give advice," the founder said, "he role-played the entire negotiation with me, drawing on his experience selling to the exact same customer twenty years earlier." This wasn't mentorship; it was apprenticeship.

The failures were equally instructive. Not every company made it, but even the failures were different from typical startup deaths. These companies failed because the technology was too early, the market wasn't ready, or the enterprise sales cycles were longer than expected—not because they ran out of money chasing user growth metrics that didn't matter.

Naganand reflected on the Numocity exit: "We, at Ideaspring Capital, have been a firm believer in the fact that, with a sound business model and a scalable business, global product start-ups can be established from India. Numocity is a great example of this. There will be an accelerated adoption of electric vehicles as the preferred option for mobility, while bypassing traditional fuel-intensive modes of transportation. In such a scenario, Numocity's solution will become very valuable to all the members in the EV ecosystem."

The Fund I report card was impressive by any measure. Four exits, 40% capital returned before the fund was fully harvested, and most importantly, proof that Indian companies could build global products if given the right support. But Naganand saw it differently. Fund I was just the proof of concept. The real test would come with Fund II.

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V. The Entrepreneur-First Philosophy

There's a moment in every board meeting where the venture capitalist asks, "What's your burn rate?" Naganand never asks this question. Instead, he asks, "Which customer meeting didn't go as planned, and what did we learn?" The difference between these questions is the difference between financial engineering and company building.

For Ideaspring Capital's founder and managing partner, Naganand Doraswamy, you cannot have a founder-first approach without both investment conviction based on the entrepreneur and working more closely with founders going beyond investing. This isn't marketing copy—it's lived experience from someone who's sat on both sides of the table.

The philosophical foundation goes deeper than empathy. We do not consider ourselves fund managers, as our job is to identify early-stage big revenue product companies, give them money, and be available to help them succeed. That phrase—"be available"—carries weight. Not "add value" or "provide strategic guidance," but simply be available. Because sometimes what a founder needs at 11 PM isn't strategy but someone who understands why they can't sleep.

Consider how Ideaspring structures its involvement. While most VCs talk about "operator experience," few have actually operated anything recently. Naganand brings a wealth of experience as Co-Founder and EVP at SPAN Infotech India Pvt Ltd, and as Co-Founder of Lexar Networks. When he advises a founder on enterprise sales, he's not reciting a playbook—he's remembering his own battle scars.

The firm's Startup Assist program embodies this philosophy. In addition to funding, the fund has a unique program "startup assist" that provides key interventions to increase focus on customer and product management. Note the specificity: not marketing, not PR, not "growth hacking," but customer and product management—the two things that actually matter for B2B companies.

The approach to founder psychology is particularly nuanced. Any founder who has reached $10 million in revenue should take a call on whether they want another round of funding or get an exit, but if they want an IPO, they must prepare for another 5-7 years of hard grind. This isn't pushing founders toward exits—it's giving them permission to consider all options without shame.

The selection process itself reflects deep operator empathy. While other funds optimize for pattern matching (IIT degree, McKinsey experience, second-time founder), Ideaspring looks for something different. They seek founders who understand that building enterprise products is fundamentally different from consumer apps. It's not about viral growth; it's about solving real problems for customers who will pay real money.

One portfolio founder described the first meeting with Naganand: "He spent two hours asking about our architecture decisions. Not our TAM or our go-to-market strategy, but why we chose microservices over monolithic design. I realized he actually understood our product better than most of our engineers."

The physical proximity model from Fund I wasn't just about convenience. When founders could walk down the hall to discuss a technical challenge or a customer objection, problems got solved faster. The overhead of scheduling, traveling, and "managing up" to investors disappeared. It was like having a technical co-founder with 30 years of experience sitting in the next room.

I strongly believe that mentoring without capital is useless as much as capital without mentoring, Naganand emphasizes. This bidirectional view is critical. Money without guidance leads to expensive mistakes. Advice without resources leads to frustration. Ideaspring provides both, but more importantly, it provides them simultaneously.

The fund's approach to failure is particularly telling. When a portfolio company struggles, the first question isn't "How do we salvage our investment?" but "What's best for the founders?" Sometimes that means finding a soft landing through an acqui-hire. Sometimes it means a hard pivot. Sometimes it means admitting the timing was wrong and shutting down gracefully. The focus remains on the founder's long-term journey, not the fund's short-term returns.

Naganand, Suri, and Arihant bring deep experience in scaling products and companies as entrepreneurs themselves, coupled with a quiet confidence that commands respect. That quiet confidence is key. These aren't VCs who need to dominate board meetings to prove their worth. They've already built and sold companies. They have nothing to prove, which paradoxically makes their advice more valuable.

The founder-first philosophy extends to terms and structure. While the specifics remain confidential, multiple founders confirmed that Ideaspring's terms were founder-friendly even by Indian standards. No aggressive liquidation preferences, no excessive board control, no financial engineering that prioritizes fund returns over company building. The logic is simple: aligned incentives lead to better outcomes for everyone.

As one founder put it: "Most VCs are playing venture capital. Naganand is building companies. We just happen to be the ones doing the building."

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VI. Fund II & Scaling Up (2022-Present)

The WhatsApp message came at 6 AM on a humid August morning in 2022: "We're in for Fund II. Same terms as last time." Within weeks, 80% of Ideaspring's investors and limited partners who participated in the first fund returned for the second fund. In an ecosystem where raising a second fund is often harder than the first, this vote of confidence was extraordinary.

The second fund target was Rs 250-300 crore. The VC firm had already raised Rs 210 crore from existing and new backers. But what's remarkable isn't the size—it's the discipline. Our second fund will not go beyond Rs 300 crore in size, as anything above this we do not know how to give back the returns to our investors. In a market where every fund wants to be bigger than the last, Ideaspring chose constraint over growth.

The Fund II portfolio strategy evolved from Fund I lessons. The average ticket size increased from Rs 8-9 crore in Fund I to Rs 15-18 crore. This wasn't inflation or market pressure—it was recognition that deep tech companies needed more runway to reach product-market fit. Enterprise sales cycles hadn't gotten shorter; if anything, post-pandemic digital transformation had made them more complex.

By 2024, the portfolio was hitting its stride. In 2024, it made 6 investments, while as of April 2025, it has made 1 investment. The pace—roughly four investments per year—remained consistent with Fund I. No acceleration despite having more capital, no pressure to deploy quickly. Each investment still got the same deep diligence, the same hands-on involvement.

Its most recent first time investment was in Tvaster Genkalp and most recent follow-on round was in Ahammune Biosciences. Most recently it led the $1.25M Seed round of Tvaster Genkalp along with Invigo Softwares. Tvaster Genkalp, working on liquid biopsy cancer diagnostics, represented the fund's expansion into deep science—a natural evolution from deep tech.

The momentum was building across the portfolio. In December 2023, Simyog Technology raised ₹200,000,000 in a Seed round from 1Crowd and other investors. In July 2023, Okulo Aerospace raised ₹82,000,000 in a Pre Seed round from Forge Innovation & Ventures and others. In June 2023, BluJ Aero raised $2,250,000 in a Seed round from Endiya Partners and others.

But the headline investment of Fund II was ClearTrust. ClearTrust, a new-age ad tracking and fraud detection platform, raised $1.9 million in its pre-Series A round led by Ideaspring Capital with participation from Piper Serica Angel Fund. The company addressed a massive problem: ad fraud costing advertisers billions annually. ClearTrust helps save costs by at least 30%, targeting a served available market of $10 billion annually.

The ClearTrust investment showcased Ideaspring's evolved thinking. This wasn't pure enterprise software but a cybersecurity play for the digital advertising ecosystem. The platform offers security solutions, including traffic scanning, precise tracking, and a real-time dashboard with over 140+ traffic scoring filters, system alerts, and many customer-centric features. The technical complexity was significant, but so was the market opportunity.

The company has witnessed a 3X annual growth for the last two years and aims for a yearly revenue of $10 million by 2027. These weren't unicorn projections but realistic targets based on actual customer traction. The path to $10 million ARR—Ideaspring's key milestone—was clear and achievable.

The September 2023 exit of Bewgle to Acceldata validated the Fund II strategy. Bewgle was backed by Ideaspring Capital. Acceldata announced that it has acquired Bewgle, a cutting-edge artificial intelligence platform, to expand its best-in-class enterprise data observability capabilities into AI and large language models. Though terms weren't disclosed, the acquisition represented another successful exit, proving the model worked across multiple funds.

Ideaspring Capital has a portfolio of 29 companies. Ideaspring Capital has made over 40 investments, maintaining a selective approach by investing in only 4–6 startups annually. The discrepancy between portfolio companies and total investments reflected follow-on rounds in winners—exactly as planned.

The Fund II investor base told its own story. Yes, 80% of Fund I LPs returned, but the new investors were equally interesting. Family offices that had watched Fund I from the sidelines, successful entrepreneurs who'd exited their own companies, even some international LPs interested in India's deep tech potential. The fundraise validated both the model and the market opportunity.

Naganand Doraswamy, managing partner at Ideaspring Capital, said the new fund size is likely to exceed Rs 265 crore it had raised for the second fund. This suggested a Fund III was already in planning, though Naganand remained characteristically understated about future plans.

The portfolio construction in Fund II showed evolution without revolution. Still focused on B2B, still investing at seed and pre-Series A, still providing hands-on operational support. But the sectors had expanded: climate tech, defense tech, biosciences joining the core enterprise software focus. India's deep tech ecosystem was maturing, and Ideaspring was maturing with it.

It typically completes about four investments in a year. This pace—one investment per quarter—allowed for deep involvement with each company. While other funds were racing to deploy capital in a frothy market, Ideaspring maintained its discipline. The math was simple: better to make four great investments than forty mediocre ones.

As 2025 progresses, Fund II is entering its harvest phase. Several portfolio companies are approaching the magical $10 million ARR mark. Exit conversations are beginning. The returns from Fund I set a high bar, but early indicators suggest Fund II might exceed even those impressive metrics. The model isn't just working—it's getting better.

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VII. The Deep Tech & AI Pivot (2023-2025)

The Bangalore tech ecosystem in 2023 felt different. ChatGPT had launched six months earlier, and suddenly every startup claimed to be "AI-powered." Pitch decks that mentioned "SaaS" in 2022 now screamed "GenAI." But in Ideaspring's Jayanagar office, the response was measured, almost skeptical. They'd seen hype cycles before.

The firm seeks to invest in business-to-business, deep tech, climate tech, artificial intelligence, biotech, defense, enterprise, blockchain, biosciences, web 3.0, the future of work, and financial infrastructure sectors. This wasn't a pivot to chase the AI boom—these sectors had been on the radar since Fund II's inception. What changed was the market's readiness, not Ideaspring's thesis.

The deep tech momentum in India was real but nuanced. Several funds like Speciale Invest, Ideaspring, and Mela Ventures are raising fresh capital to invest in AI, spacetech, and robotics. While early-stage funding is available, challenges remain in growth-stage investments and achieving successful exits for deeptech companies. Indian deeptech funds such as Speciale Invest, Ideaspring and Mela Ventures are raising fresh funds to step up investments as more companies come in this space on the back of government initiatives, favourable geopolitical landscape and rapid technological advancement.

The numbers told a compelling story. According to data from Venture Intelligence, investments in deeptech doubled in the first four months of 2025 to $324 million across 35 deals against $156 million from 21 deals in the same period last year. But Naganand's view was characteristically grounded: No technology is real and future-proof till enterprise adoption kicks in, and when it comes to GenAI, this is yet to happen. So watch out for this in 2024.

The AI Mavericks program, launched in collaboration with NuVentures, represented Ideaspring's structured approach to the AI opportunity. Rather than randomly investing in AI startups, they created a program to identify and nurture the most promising founders. This wasn't about riding the wave—it was about finding companies that could survive when the wave crashed.

BluJ Aero exemplified the deep tech approach. BluJ Aero bagged more than $2 Mn in a seed funding round led by Endiya Partners and Ideaspring Capital, with participation from Rainmatter Foundation. The startup is going to use the funding for developing a vertical take-off and landing (VTOL) aircraft powered by hydrogen fuel cell technology. This wasn't software pretending to be deep tech—it was actual aerospace engineering from India.

BluJ aims to create a fully autonomous cargo e-VTOL aircraft, with a payload of over 100 kg, and long-range capability. Founded in 2022, the startup has a team of nine members who hail from Boeing, GE, ISRO, Siemens, and Collins Aerospace and plans to have 20 people on board by the end of 2023. The pedigree mattered: these weren't fresh graduates building their first startup but experienced aerospace engineers solving real problems.

Okulo Aerospace pushed even further into frontier technology. Ideaspring Capital has been a true partner, offering strategic guidance, industry connects, and operational insights that have helped Okulo Aerospace scale its long endurance solar-electric UAVs for persistent monitoring use cases in Enterprise and Defence. Defense tech from India wasn't just possible—it was happening.

The biosciences bet with Ahammune represented another frontier. In September 2024, Ahammune Biosciences raised $5 million in a Series A round. Moving from pure software to life sciences required new expertise, new networks, new types of patience. But the underlying thesis remained: deep technical innovation from India for global markets.

Ideaspring's Doraswamy believes that unfortunately India still needs enriched data. Despite the internet growth of the past decade, India is still a data-poor nation, which makes it harder to make impactful models. For AI to truly have an ethical impact, the key is health data, education data and social data. Financial data currently has low AI applicability, but without the key data pillars, AI development in India will remain on the surface.

This realistic assessment of India's AI challenges set Ideaspring apart. While others chased chatbot wrappers and prompt engineering startups, Ideaspring looked for companies building actual intellectual property. The question wasn't "Does this use AI?" but "Does this create defensible value?"

The climate tech investments reflected another dimension of the deep tech thesis. Climate change wasn't just an environmental crisis—it was a massive business opportunity for companies with real solutions. But again, the focus was on deep technology, not greenwashing. Real innovations in materials science, energy storage, carbon capture—not just carbon accounting software.

Ideaspring's Doraswamy told ET that while fundraising is still tough, the current geopolitical situation is playing in favour of India's startup ecosystem. Another deeptech investor explained that India is a top choice for global deeptech investors from the US and Europe, with many favouring India over China and Israel.

The geopolitical tailwinds were real. The China decoupling, the Israel uncertainty, the global recognition of Indian engineering talent—all created opportunities. But Naganand's view remained pragmatic: tailwinds help, but you still need to build great products.

The situation is complicated for early-stage investors in AI, especially those that have small ticket sizes. While the capital requirements for the infra and application layer are lower, it is not easy to build in a lean manner in AI. As a result, smaller seed funds have to either settle for smaller stakes while coinvesting with larger funds or basically take unnaturally big bets on a company that may not fit in their thesis.

This structural challenge shaped Ideaspring's AI investment strategy. Rather than competing with Sequoia for horizontal AI platforms, they focused on vertical applications where domain expertise mattered more than capital. An AI solution for pharmaceutical research, for logistics optimization, for agricultural yield prediction—areas where Ideaspring's operational expertise could add unique value.

The deep tech/AI pivot wasn't really a pivot at all. It was the natural evolution of the original thesis: back technical founders building defensible products for global markets. Whether that technology was enterprise software, climate tech, or artificial intelligence mattered less than the fundamental approach: patient capital plus operational expertise equals sustainable value creation.

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VIII. Portfolio Management & Value Creation

Inside Ideaspring's conference room, there's no talk of "10x returns" or "unicorn potential." Instead, the whiteboard shows a different number: $10 million. Ideaspring Capital's investment focus is clear as day: help as many startups in its portfolio to reach $10 million in revenues so that they can either get an exit or go for an initial public offering.

This $10 million philosophy drives everything. We want to get a decent exit and remain invested till startups get a $10 million revenue, and a valuation anywhere between $60-100 million. Notice the precision: not $100-500 million, not unicorn dreams, but $60-100 million. In the venture capital world of power laws and moonshots, this is almost heretical.

The math is revealing. If you invest at a $10-15 million valuation and exit at $75 million, that's a 5-7x return. Do this consistently across a portfolio, and you don't need unicorns to generate outstanding fund returns. More importantly, these exits actually happen, unlike the unicorn lottery tickets most funds are buying.

Overall, Ideaspring Capital portfolio has seen 5 acquisitions, namely Numocity, Bewgle and Whodat. Each exit validated the strategy. These weren't fire sales or acqui-hires to save face. They were strategic acquisitions by global companies recognizing value in Indian innovation.

The Numocity exit to ABB remains the gold standard. Ideaspring Capital Founder and Managing Partner Naganand Doraswamy said the company has been a firm believer in the fact that with a sound business model and a scalable business, global product startups can be established from India and Numocity is a great example of this. There will be an accelerated adoption of EVs as the preferred option for mobility, while bypassing traditional fuel-intensive modes of transportation. In such a scenario, Numocity's solution will become very valuable to all the members in the EV ecosystem.

The hands-on support model goes far beyond board meetings. Ideaspring allows the founders to have full control of their team and product building, while it brings its expertise to other domains, such as helping startups get their first set of customers, getting the right messaging in the market, defining the future roadmap, and helping them raise their next round of funding.

Technical validation is particularly crucial. When Ideaspring evaluates a company, Suryaprakash Konanuru, the CTO, actually reviews the code. Not the architecture diagrams or the technical documentation—the actual code. One founder recalled: "Suri found a memory leak in our application that our own engineers had missed. That's when I knew these weren't typical VCs."

Customer connections represent another key value addition. The team at Ideaspring Capital has been tremendous support in business through customer connects and assisting us in finding the product market fit. But these aren't random introductions. Naganand leverages relationships built over 30 years—CTOs who were engineers when he was building products, procurement heads who bought from his companies.

The strategic guidance is equally specific. Any founder who has reached $10 million in revenue should take a call on whether they want another round of funding or get an exit, but if they want an IPO, they must prepare for another 5-7 years of hard grind. This isn't generic advice—it's a framework based on pattern recognition from dozens of portfolio companies.

The portfolio support extends to crisis management. When one portfolio company faced a critical customer escalation, Naganand flew to the customer's headquarters unannounced. His presence alone—a veteran who'd built and sold companies—changed the conversation. The customer renewed and expanded the contract.

The VC firm has already returned 40% of the capital raised from the first fund. According to Naganand, Ideaspring Capital is targeting a minimum return of 2X from the first fund, with the potential to generate 5X returns. These aren't projections—the 40% has already been returned to LPs. Cash, not paper gains.

Board participation reflects the operational philosophy. Naganand Doraswamy holds 10 board seats including Ahammune, Ambee, B2Brain, Kcat Enzymatic, and Lavelle Networks. Ten board seats would overwhelm most investors, but when you're genuinely adding operational value, not just monitoring investments, it's manageable.

The follow-on strategy is disciplined. Not every company gets follow-on funding. The bar is clear: demonstrated traction toward the $10 million revenue goal. This isn't abandoning struggling companies—Ideaspring continues supporting all portfolio companies—but capital allocation follows performance.

Over the past 8 years, 293 investors have co-invested in Ideaspring Capital's portfolio companies. This includes funds and angels. There are companies where Techstars has invested before Ideaspring Capital. This co-investor network provides portfolio companies with options for growth capital without diluting Ideaspring's involvement.

The value creation model has evolved but hasn't fundamentally changed. What worked in Fund I—deep operational involvement, technical validation, customer connections—continues in Fund II. The only difference is experience. Eight years in, the pattern recognition is sharper, the network is deeper, the playbook is more refined.

As one portfolio CEO summarized: "Most VCs give you money and advice. Ideaspring gives you money and rolls up their sleeves. When we had a critical product decision, Naganand and Suri spent a weekend with our engineering team. Try getting that from Tiger Global."

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IX. Playbook: The Ideaspring Model

There's a slide in Ideaspring's deck that never changes. While other VCs update their slides quarterly with new unicorn logos and inflated metrics, this one remains constant: "Entrepreneur-turned-investor advantage." It's not a differentiator—it's the entire thesis.

We do not consider ourselves fund managers, as our job is to identify early-stage big revenue product companies, give them money, and be available to help them succeed. That self-perception—not fund managers but company builders who happen to manage a fund—shapes every decision.

The entrepreneur-turned-investor advantage manifests in subtle ways. When a founder says, "Our enterprise sales cycle is stretching to nine months," Naganand doesn't panic. He remembers Span Systems taking 18 months to close its first enterprise deal. When a CTO wants to rebuild the architecture, Suri doesn't reflexively say no. He remembers rebuilding PhotonEx's stack three times before getting it right.

Naganand says any founder who has reached $10 million in revenue should take a call on whether they want another round of funding or get an exit, but if they want an IPO, they must prepare for another 5-7 years of hard grind. That growth can be very different where it is about building the company and not about the idea anymore. This isn't theoretical—it's lived experience from someone who's made these exact decisions.

The patient capital approach deserves deeper examination. Most Indian VCs operate on a 7-10 year fund cycle with pressure to show markups every 18 months. Ideaspring operates differently. The Fund I exits came 5-6 years after investment. No pressure for premature Series B rounds to show paper gains. No pushing companies to grow faster than their natural rhythm.

This patience extends to market timing. When Ideaspring invested in EV charging infrastructure through Numocity in 2020, EVs were still negligible in India. The exit to ABB in 2022 wasn't luck—it was patient capital meeting inevitable market evolution. As Naganand noted about the exit: There will be an accelerated adoption of EVs as the preferred option for mobility, while bypassing traditional fuel-intensive modes of transportation. In such a scenario, Numocity's solution will become very valuable to all the members in the EV ecosystem.

The deep operational involvement has its own playbook. Week 1: Technical architecture review. Month 1: Customer development strategy. Month 3: First customer meetings with founders. Month 6: Pricing strategy refinement. Month 12: Series A preparation. This isn't a template—it's adapted for each company—but the milestones create rhythm and accountability.

Building trust with founders requires vulnerability from the investors too. Naganand openly discusses his failures—the two companies before Span that didn't work out. Before Span Infotech, I had started two more companies that did not take off. But I had immense learnings from their closure. These aren't war stories to impress—they're teaching tools to help founders avoid similar mistakes.

The focus on unit economics over valuation represents another differentiation. While the broader ecosystem celebrates valuation markups, Ideaspring celebrates CAC/LTV ratios and gross margins. One portfolio company CEO recalled a board meeting where they discussed reducing burn to extend runway. "Any other investor would have pushed us to raise more money. Naganand asked, 'Can we get to profitability without raising?' That changed everything."

The playbook for international expansion is particularly refined. Ideaspring Capital's Startup Assist program was of immense support as we ventured into the US market. Their experience and counsel has been invaluable in shaping our business. This isn't generic "go-to-market" advice but specific guidance on enterprise sales cycles, compliance requirements, and partnership structures based on decades of selling to US enterprises.

The approach to competition is notably different. While most VCs push portfolio companies to crush competitors, Ideaspring often encourages collaboration or even consolidation. If two portfolio companies are competing for the same narrow market, why not merge them? This happened with two Fund I companies (names withheld), creating a stronger combined entity that eventually got acquired.

Constraint as a strategic choice permeates the model. Our second fund will not go beyond Rs 300 crore in size, as anything above this we do not know how to give back the returns to our investors. This isn't false modesty—it's recognition that the high-touch model doesn't scale. You can't provide deep operational support to 50 companies. You can to 15-20.

The playbook's most radical element might be its approach to failure. When portfolio companies fail—and some do—the focus shifts to founder rehabilitation. Help them find jobs, make introductions for their next startup, even invest again if they start something new. The network effect this creates is powerful: founders become ambassadors, successful entrepreneurs refer deals, the ecosystem strengthens.

As the Indian startup ecosystem matures, many elements of the Ideaspring playbook are being copied. Other funds now claim "operator experience" and "patient capital." But as one LP observed, "You can copy the playbook, but you can't copy 30 years of building companies. That's Ideaspring's real moat."

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X. Competition & Market Dynamics

The Bengaluru venture capital ecosystem in 2025 feels like Manhattan real estate—everyone's fighting for the same assets, prices are insane, and newcomers arrive daily with fresh capital and bold claims. Yet Ideaspring's office remains in modest Jayanagar, away from the glass towers of MG Road where Tiger Global and Sequoia hold court.

Over the past 8 years, 293 investors have co-invested in Ideaspring Capital's portfolio companies. This number tells a story: Ideaspring doesn't compete—it collaborates. While larger funds fight over hot deals, Ideaspring quietly builds relationships with patient founders building complex products.

The competitive positioning is deliberately narrow. Ideaspring doesn't compete with Sequoia for consumer internet deals. It doesn't fight Accel for SaaS marketplaces. They have invested in Enterprise Applications, High Tech, Life Sciences and 16 other sectors, but always with the same lens: deep technology, B2B focus, global market potential.

Consider the co-investor network. Names like Jigar Harish Mehta share a substantial percentage of its portfolio. When Techstars, with its global network, co-invests with a small Bangalore fund, it's validating something beyond financial returns. It's recognizing that Ideaspring sees deals others miss and adds value others can't.

The differentiation through deep tech focus becomes clearer against the market backdrop. Indian deeptech funds such as Speciale Invest, Ideaspring and Mela Ventures are raising fresh funds to step up investments as more companies come in this space on the back of government initiatives, favourable geopolitical landscape and rapid technological advancement. Even among deep tech funds, Ideaspring stands apart through its operational depth.

Market dynamics are shifting in Ideaspring's favor. While fundraising is still tough, the current geopolitical situation is playing in favour of India's startup ecosystem. India is a top choice for global deeptech investors from the US and Europe, with many favouring India over China and Israel. The macro tailwinds help, but execution still matters.

The growth stage challenge remains real. While early-stage funding is available, challenges remain in growth-stage investments and achieving successful exits for deeptech companies. This is where Ideaspring's $10 million exit strategy proves prescient. Rather than hoping for growth capital that might never come, plan for exits at achievable valuations.

The competition for deep tech deals is intensifying but remains manageable. According to data from Venture Intelligence, investments in deeptech doubled in the first four months of 2025 to $324 million across 35 deals. More capital means higher valuations, but also validation that deep tech is finally getting attention.

What sets Ideaspring apart isn't just investment thesis but investment behavior. While other funds announce deals with press releases and Twitter storms, Ideaspring operates quietly. Several portfolio companies confirmed they chose Ideaspring partly because of this discretion. Building deep tech requires focus, not fanfare.

The downstream competition—for exits—is equally important. Ideaspring Capital's portfolio has seen 5 acquisitions. The most recent acquisition was Bewgle in September 2023 by Acceldata. Each successful exit makes the next one easier. Acquirers know Ideaspring portfolio companies are technically sound, properly governed, and fairly valued.

The ecosystem dynamics work in Ideaspring's favor. Java Capital co-founder Vinod Shankar said raising funds has become much easier than before. When they started in 2020, the fund had to explain to limited partners what they are doing. As the ecosystem matures, LPs better understand deep tech, making fundraising easier for focused funds.

Competitive pressure from international funds remains limited in Ideaspring's segment. Sequoia Heritage or Tiger Global might write $50 million checks, but they won't invest $2 million in a pre-revenue deep tech startup and spend weekends debugging code. The high-touch model creates its own moat.

The collaborative approach extends to potential competitors. When Speciale Invest or Mela Ventures sees a deal outside their thesis, they refer it to Ideaspring. When Ideaspring sees consumer tech or fintech opportunities, they reciprocate. This isn't weakness—it's ecosystem building.

Ideaspring Capital has a team of 16, including 4 partners. This lean structure is deliberate. While other funds hire armies of analysts and associates, Ideaspring keeps the team small and senior. Every investment gets partner-level attention because there are only partners.

The market perception has evolved significantly. Early skeptics who dismissed Ideaspring as "too small" or "too focused" now acknowledge the model works. One competing VC admitted off-record: "We chase unicorns and get zeros. Ideaspring builds solid companies and actually returns capital. I know which model LPs prefer."

Looking ahead, competition will intensify but in predictable ways. More funds will claim deep tech expertise. More capital will flow into the sector. Valuations will rise. But the operational expertise, the patient capital, the $10 million exit philosophy—these can't be easily replicated. As Naganand says with characteristic understatement, "Let others chase unicorns. We'll keep building real companies."

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XI. Analysis & Future Trajectory

The bear case for Ideaspring writes itself. Limited fund size in an era of mega-rounds. Focus on deep tech when AI promises instant riches. Headquarters in Bangalore when the action has moved to Delhi and Mumbai. A founder who's 59 when most successful VCs are 35. By conventional metrics, this shouldn't work.

Yet The VC firm has already returned 40% of the capital raised from the first fund. That's not paper returns or unrealized gains—that's cash to LPs. In an Indian venture ecosystem where most funds never return capital, this is extraordinary.

The bull case rests on three pillars. First, operator DNA. Naganand brings wealth of experience as Co-Founder and EVP at SPAN Infotech, Co-Founder of Lexar Networks, and has worked with PhotonEx, Nortel Networks, Bay Networks, and FTP Software. This isn't advisory experience—it's building-and-scaling experience.

Second, proven exits. Ideaspring Capital portfolio has seen 5 acquisitions. The Numocity exit alone, delivering 10X returns, validates the entire strategy. These aren't acqui-hires to save face but strategic acquisitions at meaningful valuations.

Third, government tailwinds. Indian deeptech funds are raising fresh funds on the back of government initiatives, favourable geopolitical landscape and rapid technological advancement. The India stack, PLI schemes, defense indigenization—all create unprecedented opportunities for deep tech startups.

Naganand holds 10 board seats, positioning him at the center of India's deep tech ecosystem. This isn't just board observation—it's active governance and strategic guidance. The network effects compound: portfolio companies collaborate, share customers, sometimes merge.

The fund size constraint, seemingly a weakness, is actually strategic genius. The new fund size is likely to exceed Rs 265 crore it had raised for the second fund. Even Fund III remains modest by global standards. But this constraint enforces discipline: careful selection, deep involvement, realistic exits.

The next five years present extraordinary opportunities. India's deep tech ecosystem is where consumer internet was in 2010—early but accelerating. The AI revolution isn't just about LLMs but about domain-specific applications where Ideaspring's portfolio can excel. Defense tech, climate tech, health tech—all reaching inflection points.

The talent pipeline is strengthening. BluJ Aero has a team of nine members who hail from Boeing, GE, ISRO, Siemens, and Collins Aerospace. This caliber of talent choosing startups over stable corporate jobs signals ecosystem maturity.

International validation is accelerating. ABB acquiring Numocity, Acceldata acquiring Bewgle—global companies recognizing Indian innovation. Each exit makes the next one easier, creating a virtuous cycle of value creation and realization.

The LP perspective is particularly telling. 80% of Ideaspring's investors and limited partners who participated in the first fund returned for the second fund. In venture capital, LPs vote with their wallets. This retention rate speaks louder than any pitch deck.

Risk factors remain real. Deep tech's longer gestation periods mean patient capital is essential but rare. Challenges remain in growth-stage investments and achieving successful exits for deeptech companies. The valley of death between seed and Series B remains treacherous.

The bigger picture transcends Ideaspring. This is about India's transition from services to products, from cost arbitrage to innovation arbitrage. With a sound business model and a scalable business, global product startups can be established from India. Ideaspring isn't just proving this—it's building the playbook.

The institutional legacy might be the most important outcome. By demonstrating that patient capital plus operational expertise can generate returns, Ideaspring creates a template for others. Not everyone can be Naganand with 30 years of operating experience, but the principles—focus, patience, operational involvement—are replicable.

Ideaspring has made 25 investments in Seed stage with average round size of $1.68M. These aren't spray-and-pray numbers but careful, concentrated bets. Quality over quantity, depth over breadth, returns over vanity metrics.

Looking ahead to 2030, several scenarios seem plausible. Ideaspring could raise larger funds, breaking its own rules about size. It could expand internationally, following portfolio companies to Southeast Asia or the Middle East. It could specialize further, becoming the definitive defense tech or climate tech fund.

But the most likely scenario is continuity with evolution. Fund IV with Rs 400 crore. Same philosophy, same team, same focus, slightly larger checks. Because when you've found something that works—patient capital, operational expertise, realistic exits—why change?

As one LP summarized: "In a market full of funds trying to be Sequoia, Ideaspring is content being Ideaspring. That's why it works."

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XII. Epilogue & Lessons

The conference room in Jayanagar has seen hundreds of pitches over eight years. The coffee machine—the same one from 2016—still makes terrible coffee. The whiteboard still shows "$10 million" in the corner. Some things don't change, and perhaps that's the point.

Key takeaways for founders emerge clearly from Ideaspring's journey. First, timing matters more than technology. PhotonEx had brilliant technology but died in the nuclear winter. Numocity had good technology but perfect timing. Any founder who has reached $10 million in revenue should take a call on whether they want another round of funding or get an exit. Know when to push, when to pivot, when to exit.

Second, choose investors who've been in your shoes. Naganand looks at businesses and founders very differently than someone who may be a very analytical and sharp investor but with no entrepreneurial background. The empathy that comes from having failed, struggled, and succeeded can't be taught in business school.

Third, revenue matters more than valuation. The obsession with unicorn status has destroyed more companies than it's created. Building a sustainable $10 million revenue business that can exit at $75 million creates more value than chasing billion-dollar valuations that never materialize.

For emerging fund managers, different lessons apply. We do not know how to give back returns if the fund gets too large—this admission of limitations is powerful. Know what you're good at. Don't try to be everything to everyone. Constraint breeds creativity and discipline.

The institutional model matters as much as investment acumen. We do not consider ourselves fund managers—this identity shapes behavior. Are you building an investment firm or supporting entrepreneurs? The answer determines everything from office location to partner meetings to exit strategies.

Returns come from discipline, not genius. It typically completes about four investments in a year. Four deep bets beat forty shallow ones. The patience to wait for the right companies, support them properly, and exit at the right time—this is the actual job.

The India opportunity requires nuanced understanding. Despite the internet growth of the past decade, India is still a data-poor nation. Recognizing structural challenges while remaining optimistic about long-term potential—this balance separates sustainable funds from hype chasers.

What Western VCs miss about Indian B2B is cultural and structural. Indian enterprises buy differently, sell differently, scale differently. B2C startups are initially operationally intensive and later become tech-intensive, but it is the opposite for B2B startups. Understanding these inversions is crucial for success.

The ecosystem effect compounds over time. 293 investors have co-invested in Ideaspring Capital's portfolio companies. Each successful exit makes the next one easier. Each failed company that's handled well strengthens founder trust. Reputation compounds like interest.

Building an institution versus running a fund represents the ultimate choice. Funds optimize for returns to LPs. Institutions optimize for ecosystem impact. Ideaspring manages to do both, but the priority is clear: You're still very close to the entrepreneur ecosystem. The entrepreneurs come first; returns follow.

The personal journey of Naganand offers its own lessons. Starting a fund at 50 after already achieving financial success isn't about money—it's about meaning. It's hard to do one more startup, but supporting dozens of startups multiplies impact.

Conviction, confidence, and support – these three words essentially sum up Ideaspring's involvement. Naganand and Suri are great partners to have on your side during the early stages of your startup. This founder testimony captures something beyond metrics: the human element of venture capital done right.

Looking back, the Ideaspring story isn't about disruption or revolution. It's about evolution—slow, patient, disciplined evolution. In a world obsessed with moving fast and breaking things, Ideaspring moves deliberately and builds things. Things that last. Things that matter. Things that actually generate returns.

The measure of success isn't AUM or unicorns created or media coverage. It's simpler: Returned 40% of capital from first fund. Cash returned to LPs who trusted an entrepreneur-turned-investor with their capital. In the end, that's the only metric that matters.

As Naganand would say, probably while making terrible coffee in that unchanged conference room: "We're not trying to change the world. We're trying to build good companies, generate decent returns, and help entrepreneurs succeed. If we do that consistently, maybe we do change the world. Just quietly."

The rain has stopped in Bengaluru. The streets are drying. Somewhere in Jayanagar, another entrepreneur is walking into Ideaspring's office with a prototype that barely works and a vision that might change everything. The cycle continues. The work goes on.