Kairon Capital’s ₹90 Cr Close Implies “Series A Gap” Financing is Back—But Only for Unit-Economic Positive Brands

The Situation

Deepankur Malhotra (ex-Amazon, Olympus Capital) has secured the first close of Kairon Capital’s debut fund at ₹90 Cr—60% of its ₹150 Cr target. The fund includes a ₹50 Cr greenshoe option, bringing potential capacity to ₹200 Cr.

Unlike generalist micro-VCs, the Limited Partner (LP) base is strictly operational: it includes legacy FMCG giant Emami and founders from successful Indian D2C scale-ups like Livspace (Saurabh Jain), Innovist (Rohit Chawla), and XYXX (Yogesh Kabra). The firm targets a concentrated portfolio of 14–15 companies with check sizes between ₹2 Cr and ₹14 Cr.

Why It Matters

This fund addresses the specific “liquidity trap” currently strangling Indian consumer startups: the gap between Seed (experimentation) and Series A (institutional scaling).

  • The “Valley of Death” is bridging: Large institutional funds (Peak XV, Elevation) have moved upstream, leaving post-PMF brands with ₹5-10 Cr revenue starving for capital. Kairon is explicitly positioning itself to underwrite this “proven but not scaled” phase.
  • Smart Capital over Passive Capital: The presence of Emami and D2C operators as LPs signals a shift in the market. Founders are trading valuation premiums for “distribution intelligence”—access to offline retail networks and supply chain expertise that purely financial VCs cannot provide.

Founder Action

If you are a consumer founder generating ₹2-5 Cr ARR:

  • Audit your “Bridge” Story: Do not pitch “growth at all costs.” Kairon’s thesis requires demonstrated unit economics. You must prove that ₹5 Cr of investment yields predictable channel expansion, not just customer acquisition.
  • Leverage the LP List: When pitching, explicitly ask how the fund leverages its LP network (e.g., Emami’s distribution) to solve your specific offline bottlenecks.
  • Target the “Missing Middle”: Position your round as a bridge to Series A. Show exactly how this capital gets you to the metrics required by Tier-1 VCs (typically ₹1-2 Cr MRR).