Together Fund has announced its second fund worth $150 million to continue backing startups in the Indian software-as-a-service (SaaS) and artificial intelligence (AI) space.

Led by Freshworks founder Girish Mathrubootham and Eka Software founder Manav Garg, the total corpus for Together’s Fund II is almost double that of the previous one.

This indicates that the firm looks to make larger follow-on investments and back local disruptors in the generative AI space.

Together Fund II

In 2021, Together Fund began with $85 million to support and help new product SaaS startups. Their goal was to back these startups that were creating software services for global markets. About 33% of the $85 million came from big investors, while the rest of the money came from startup entrepreneurs and operators.

In contrast to its first fund, around 95% of the corpus for Together’s Fund II will come from institutional investors, as mentioned by Manav Garg. They plan to begin using the capital from Fund II in the first quarter of the calendar year 2024.

As per Garg, the opportunity for SaaS has expanded from focusing only on Fortune 500 companies to now building for 5 million SMBs (small and medium businesses. And with AI, there is only going to be an increase in software utilisation.

Commenting on the development, Girish Mathrubootham, founding partner of Together Fund, said,

“In light of this once-in-a-generation SaaS and AI opportunity, we are extending our founder-first philosophy with our second fund, supporting founders from the inception stage of their journey. We are excited to partner with these audacious founders who need bold and committed investors with extensive operating experience.”

The founder-led VC fund has also marked the first close of Fund II, raising the corpus from endowments and sovereign funds across the US and Asia. Through Fund II, Together plans to back SaaS startups across themes of cybersecurity, devtools and healthcare, apart from AI.

This development has come at a time when investment in Indian SaaS has fallen considerably to $635 million in the first half of 2023. According to research firm Venture Intelligence, investment in Indian SaaS was around $3.4 billion for the same period last year.

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