Sparrow Capital has closed its third fund at Rs 475 crore, giving the Bengaluru-based venture capital agency extra capital to make bigger seed-stage investments.

The early-stage, sector-agnostic agency plans to again 25 to 30 startups over the following three years, with preliminary cheques of $1 million to $2 million. It has already made 5 investments from the brand new fund.

About 60% of the corpus got here from world investors, together with endowments, foundations, funds of funds and household places of work. The remainder was raised from startup founders, operators, Indian household places of work and excessive web price people.

The investor combine marks a shift for Sparrow, whose earlier funds had been backed largely by non-institutional or home restricted companions.

The brand new fund is considerably bigger than Sparrow’s Rs 120 crore second fund, which backed 27 corporations with cheques of $300,000 to $500,000. The bigger corpus is predicted to permit the agency to guide or co-lead extra seed rounds.

Sparrow had raised Rs 122 crore within the first shut of the fund in August 2025, earlier than rising the corpus to about Rs 280 crore by April 2026.

The agency has been investing since 2020. Its web site lists Yash Jain, Aakash Goyal and Darshit Vora as basic companions, and Arpit Agarwal as chief monetary officer.

In response to ET, citing knowledge collected from Tracxn’s India Tech H1 2026 report, seed and early-stage startups raised $3.34 billion throughout 608 rounds within the first half of 2026, in contrast with $2.96 billion throughout 1,055 rounds a yr earlier.

That pushed the common cheque measurement throughout seed and early-stage rounds to about $5.5 million, from $2.8 million a yr earlier.

Sparrow will proceed to speculate throughout sectors. The agency is seeing stronger founder exercise in shopper, fintech and AI-native software program corporations being constructed from India for world markets.

It plans to order 30% to 40% of the brand new fund for follow-on investments, broadly according to its earlier fund, the place it had put aside about 35% for follow-on rounds.

Sparrow has stated valuations stay excessive in some components of the seed market, particularly for skilled founders and startups constructing in areas similar to AI. Nevertheless, most seed rounds stay smaller, with many startups valued at lower than $10 million.

Corporations from Sparrow’s first fund, together with GoKwik, Apna Mart and Deconstruct, have matured and will supply liquidity alternatives over the following two to a few years.

Sparrow has backed greater than 40 corporations to date. Its portfolio contains GoKwik, Apna Mart, Deconstruct, E6data, Gushwork, Furnishka, Aukera, StrainX, Superhealth, Homerun and Optimist.