Sparrow Capital, a Bengaluru-based early-stage VC firm founded in 2020, is set to raise ₹400 crore (approx. $50 million) for its third fund. This move comes amid rising fundraising activity among India-focused venture capital firms in 2025.
Sparrow Capital, an early-stage venture capital (VC) firm headquartered in Karnataka’s capital city, Bengaluru, is preparing to raise ₹400 crore (approximately $50 million) for its third fund, according to sources familiar with the matter. Founded in 2020, Sparrow Capital is a sector-agnostic VC firm known for backing promising founders in India’s booming startup ecosystem.
This will be the firm’s third fund, a major leap from its initial ₹4 crore fund and its second ₹150 crore corpus. The upcoming fund will significantly strengthen its ability to write larger cheques—beyond the current ₹2–5 crore per startup—and compete more aggressively with other venture capitalists in the early-stage investment space.
The firm, launched by former Kalaari Capital employees Darshit Vora and Yash Jain, along with Aakash Goyal from Fundamentum Partnership, has invested in over 30 companies. Notable portfolio companies include Aukera, 91Trucks, GoKwik, and Gushwork.
Sparrow’s fundraising aligns with a broader trend in India’s venture capital landscape in 2025. After VC fundraising hit a five-year low in 2024, India-focused funds are making a comeback. This resurgence is driven by a promising IPO pipeline and improved startup financing conditions.
Other players in the ecosystem are also making similar moves. IndiGo Ventures secured ₹450 crore in its debut fund, while All In Capital announced its second fund’s first close at ₹200 crore. Finvolve Ventures is reportedly working on similar fundraising efforts.
On the larger end of the spectrum, Fireside Ventures is targeting $230 million for its fourth fund, and global VC powerhouse Accel raised $650 million for its eighth India fund in January. Bessemer Venture Partners also launched its second India-specific fund at $350 million.
With significant dry powder now building up, India’s venture capital scene is poised for a major revival, and Sparrow Capital’s move further strengthens the funding momentum.
