Mumbai-based early-stage venture capital firm Cedar Hill Capital has secured a commitment from the Small Industries Development Bank of India (SIDBI) for its maiden fund, adding another domestic institutional investor to its limited partner (LP) base.
The commitment has come from the Startup India Fund of Funds 2.0, managed by SIDBI, the apex development finance institution for the micro, small and medium enterprises (MSME) sector.
The fund already counts Muthoot Finance, Hinduja Leyland Finance, IIFL and Abu Dhabi-headquartered Private Department H.E. Sheikh Mohammed Bin Khalid Al Nahyan among its LPs. It is targeting to raise Rs 250 crore (around $26.3 million), including a greenshoe option.
The size of SIDBI's commitment was not disclosed.
The Government of India's Fund of Funds for Startups programme invests in Securities and Exchange Board of India (SEBI) registered alternative investment funds (AIFs), which in turn deploy capital into early-stage startups across the country.
Cedar Hill Capital focusses on pre-Series A investments in startups building AI-first enterprise technology for the financial services sector. Its investment thesis spans areas such as payments, lending, fraud detection, regtech and insuretech, with portfolio companies selling technology solutions to banks, non-banking financial companies (NBFCs), insurers and capital market institutions.
"Enterprise fintech at the pre-Series A stage is under-served precisely because it is difficult to underwrite — the customers are regulated institutions, the sales cycles are long, and the diligence requires genuine sector depth," said Sahil Anand, managing partner at Cedar Hill Capital. "SIDBI's commitment is a strong endorsement of our focus and platform."
Anand launched Cedar Hill in 2024. It was formed through a collaboration between management consulting firm Cedar Consulting and fintech market intelligence platform IBS Intelligence. The VC firm typically takes part in pre-Series A and Series A rounds, coming in as the first institutional investor.
The firm invests exclusively in AI-first enterprise technology companies serving the financial services industry.
The maiden fund has made three investments so far including Sign3, an AI-native fraud intelligence and risk management platform.
Anand had previously told VCCircle that Cedar Hill was thinking of launching a second fund focussed on growth equity and Series A and Series B stages, targeting companies with revenues from Rs 20 crore to Rs 500 crore. The firm expects the new vehicle to be at least 1.5 to 2 times the size of its maiden fund, targeting Rs 300-350 crore or more, with cheque sizes starting at Rs 10-12 crore, he said.
