From $8 Mn To $100 Mn: Prime Venture Partners On The Growing Maturity Of Early Stage Investing

When Prime Venture Partners (PVP) launched its first fund in 2012 with a modest corpus of $8 Mn, India’s startup ecosystem was still finding its footing. And now five funds later, Prime has seen the whole maturity cycle of the Indian startup ecosystem play out. 

But 2012 was a time before UPI and India Stack and AI was something not many understood. Sanjay Swamy, Shripati Acharya, and Bala Parthsarathy, the founding partners of the venture capital firm, had little doubt that a digital inflection point was around the corner in India. 

Serial entrepreneurs and operators with stints in Silicon Valley, the trio had already been on the frontlines of building digital infrastructure for India — working on Aadhaar and mobile payments startup Eko as full-time volunteers. 

“We had seen the early signs,” recalled Swamy. “India was on the cusp of a massive digital transformation, and we’d had a small hand in shaping it. We felt it was time to play a bigger role—as investors.”

Swamy’s early bets, like ZipDial (acquired by Twitter) and Ezetap, proved prescient. Both delivered strong outcomes and helped validate the firm’s high-conviction, hands-on model, one that has remained consistent across Prime’s subsequent four funds. 

With a disciplined focus on concentrated portfolios, PVP has backed startups like NiYO, MyGate, Recko (acquired by Stripe), Happay, HackerEarth, and Dozee, often as the first institutional investor.

Now, with its fifth fund of $100 Mn closed and deployment underway, PVP is doubling down on the formula that’s defined its journey over the past 13 years. But it’s doing so in an India that looks vastly different from 2012. 

The country has leapfrogged into a digital-first economy, where payments, logistics, and customer acquisition are far more seamless. Tier 2 and Tier 3 India is no longer an afterthought. Over the past four years, Indian startups have also shown some credible exits through IPOs besides secondaries. So now even early stage VCs can dare to be a bit more certain about exits and long-term value creation.

“We believe India now offers the opportunity to build capital-efficient companies that can go all the way to IPO,” cofounder and managing partner Sanjay Swamy tells Inc42, adding, “That wasn’t true a decade ago.”

Prime Venture’s latest fund continues to target 16–18 early-stage companies, with cheque sizes between $1.5 Mn–$3 Mn. While fintech remains a core focus, vertical SaaS, AI, and deeptech are now firmly in the mix.

But the DNA of the firm remains unchanged: early believers, hands-on partners, and no half bets. “We don’t do copycats. If we’re in, we’re all in,” Swamy adds.

Swamy spoke on Prime’s investment philosophy, its latest deployment strategy, and why early-stage VC success takes a long time in India. 

Here are edited excerpts:

Inc42: Prime Ventures announced its fifth fund this year. What has changed over the years in your thesis or worldview that shaped this new fund? 

Sanjay Swamy: What’s remained the same is our core approach: back 4–5 new companies each year, work closely with the founders, and support them wherever needed. Every founder is different, every startup’s journey is different, and so are their needs. But everyone needs more than just capital—that’s our fundamental thesis.

Because we’re very selective, we also have the bandwidth to support companies deeply in their early stages. And the entire partnership is available to our founders.

Our thesis is simple—capital is just one part. Founders also need time, experience, and strategic guidance, not only in the early stages but even as they approach exit or IPO. Companies go through many phases—some face tough competitors, some face business model issues, or problems with metrics or customer cohorts, especially in lending. There are always surprises.

Our success depends on how well we help founders minimise surprises. Predictability matters as predictable business is far more IPO-ready.

And that’s why we tailor our involvement based on the company’s stage. On the same day, I might meet a founder pre-product launch and another who’s preparing for Series C. They require very different conversations. We have to switch gears constantly. And the success or failure of one company has nothing to do with the next meeting.

Inc42: Did you have to tweak your approach towards early-stage investing after the early years when sectors were seeing more maturity?

Sanjay Swamy: The way we underwrite, source, and evaluate companies has become sharper with experience. But a lot of it is also about adapting to a changing Indian market. When we started, exits were unclear. IPOs felt like a distant dream. Today, with Indian startups hitting INR 500 Cr in revenue and turning profitable, we see a clear path to domestic public listings.

The ecosystem has matured dramatically. Back then, people barely had smartphones or the ability to pay online. Now, UPI and India Stack have made onboarding seamless and digital consumption mainstream—even in Tier-2 and Tier-3 India. What was once a thesis has now become reality.

This evolution has also shaped our focus. While large horizontal plays like Paytm or PhonePe defined the first wave, we’re now excited about what we call “riches in niches.” These are vertical-specific, capital-efficient businesses solving high-margin problems for clearly defined user segments. Take MyGate, for example. It serves just 7% of India, but that segment accounts for 70% of the country’s ecommerce. Or Dozee, which has built deep-tech capabilities in contactless health monitoring.

These aren’t flashy, blitzscaling stories. But they’re large, profitable, and sustainable businesses. That’s what we’re betting on.

Inc42: Let’s talk specifics about Fund V.  How do you plan to allocate this fund, and when do you expect to start writing cheques?

Sanjay Swamy: We have already started writing cheques.

We generally invest in companies from seed to Pre-Series A. That’s our sweet spot. Occasionally, we’ll do a Series A as well. Our initial check sizes can be as low as $500K, but more often they’ll fall in the $1.5 Mn to $3 Mn range. That’s really where we’re most comfortable. Occasionally we’ll go higher or lower depending on the deal, but that’s the first check. We also follow on in subsequent rounds.

The target remains 16 to 18 companies for this fund. The actual number will depend on deal quality and the pace of deployment. Sometimes we might invest a little more or a little less in a particular company—it’s not always formulaic. Right after this call, I might come across a startup that’s incredibly compelling but needs $3.5 Mn to get in. If it feels right, we’ll do it.

The goal is to deploy most of the fund across these initial investments within the first three years, though it could stretch into a fourth. After that, the remaining capital is typically reserved for follow-ons as companies raise their next rounds.

Inc42: Fintech has been a strength for Prime, but now you’re also actively looking at vertical SaaS and AI. What’s your view on the buzz and how do you look beyond the hype?

Sanjay Swamy: Sometimes what seems like hype turns out to generate real revenue and traction, and then we look foolish for having passed on it. Ultimately, a lot of it comes down to common sense. But even that is subjective. 

What feels like common sense to me may not to you. That’s why we may back a company that others pass on. Our worldview and pattern recognition are shaped by past experience, but we’re also very founder-driven.

Sometimes you have a sector thesis, but until you meet an extraordinary founder, it doesn’t click. You suddenly think this person can truly unlock the opportunity. 

We often talk about the five T’s: Team, TAM (Total Addressable Market), Technology, Traction, and Timing.

Timing especially is underappreciated. Airbnb, for example, might not have worked six months earlier or a year later. It was the 2008 financial crisis that created both the supply and demand for such a product. Similarly, Uber emerged during a time when people were looking to cut costs and earn extra income, and trust in peer-to-peer services was just starting to take shape.

These things matter. But so do others, like whether a company can raise follow-on capital. That becomes a critical input. Also, how much capital will it need to reach escape velocity? Is it $5 Mn or $50 Mn? We prefer capital-efficient businesses.

We also look for a team’s nimbleness. Can they stay ahead of fast-moving changes? What happens if a competitor suddenly raises $30 Mn? Do they have a moat, a differentiated strategy, or execution strength to withstand pressure?

Inc42: You often say “capital is a tool, not a weapon.” How do you assess a founder’s mindset for utilising the capital?

Sanjay Swamy: Honestly, you can tell just by looking at the business plan. There’s no one-size-fits-all. Some founders build with capital as a weapon and it works for them, given the right timing and access to capital. But that’s not how we operate.

We prefer founders who use capital as a tool who focus on positive unit economics, decreasing acquisition costs over time, and increasing value. If your bucket is leaky and you keep pouring in water, there’s a problem. That’s not sustainable.

Inc42: Your fund was oversubscribed. Does that mean LPs are no longer defensive as they were two years ago?

Sanjay Swamy: It’s still not easy to raise capital. We’ve been fortunate due to our performance and discipline. But yes, macro factors are playing in India’s favour such as strong demographics, rapid digitization, India Stack, and the growing confidence in Indian IPOs. There’s also a global pivot away from China.

That said, LPs approach new relationships with deep caution. This is a ten-plus year commitment. They look for strong reputation, team integrity, and long-term alignment. For a US-based LP, backing a GP in India means betting on someone several time zones away, which takes real conviction.

Inc42: Very few VC firms in India reach a fifth fund. What does success mean to you beyond IRRs?

Sanjay Swamy: For us, success means building long-term, sustainable companies. That’s why we’ve kept our fund size the same. We are good at being selective, working deeply, and backing companies that compound steadily.

In our business, it takes 3 years to know if you’re bad at it, 10 to know if you’re good, and 20 to prove consistency. This is a long game.

We’re structured like a startup ourselves. Everyone on our team is incentivized for long-term outcomes. We focus on building companies that can hit INR 500 Cr in revenue in 5–7 years, growing 30–40% year-on-year, with profitability. If they scale to INR 2000 Cr, that’s great — but 2000 doesn’t come before 500.

The power law always holds. One or two companies will return more than the rest combined. Our job is to build and back those few.

Edited by Nikhil Subramaniam