The Fund III, which was launched in 2023, is primarily focused on B2B SaaS startups leveraging AI
The fund has already invested in 12 startups and plans to back 13 more startups in the next year
The VC firm has backed startups such as Game State Labs, Highperformr, Merlin AI, Zepic, Buddy, among others, through its fourth fund
Neon Funda VC firm started by the hosts of 100x Entrepreneur podcast (later rebranded to Neon Show), has announced the closure of its fourth fund at $25 Mn.
The Fund III, which was launched in 2023, is primarily focused on B2B SaaS startups leveraging AI. In a conversation with Inc42, managing partner Siddharth Ahluwalia said that the fund has already invested in 12 startups and plans to back 13 more startups in the next year.
Most of the 12 startups that the fund has invested in are in stealth mode. The VC firm has backed startups such as Game State Labs, Highperformr, Merlin AI, Zepic, Buddy, among others, through its fourth fund. It invests $500K to $1 Mn in startups.
“About 50% of the investments via this fund have been made in startups led by second-time founders, while the remaining investments were made in startup founders with “zero pedigree”,” Ahluwalia said, adding that the fund is “revenue focused”.
It aims to help portfolio companies achieve $10 Mn in ARR in the next three years by leveraging the experience of its limited partners (LPs), who hold CXO roles in big tech companies such as Amazon, Microsoft, HP, among others.
The VC firm has seen several exits, which Ahulwalia called “large buyouts” and underlined that the firm generally returns the principal to the LPs within 3-4 years, while the remaining amount compounds.
Earlier this year, Neon Fund’s portfolio company Requestly was acquired by SaaS unicorn BrowserStack.
Prior to this, the podcasters – Ahluwalia and Nansi Mishra – launched Neon Fund II, a $10 Mn fund for Indian B2B startups in 2022.
The VC firm counts Airmeet, Astra Security, CloudSek, InFeedo, KNOW app, Profit.co, Phyllo and SpotDraft among its portfolio companies.
This comes at a time when the Indian startup ecosystem continues to grow by leaps and bounds. Investors have been launching new funds and announcing closure of funds to back the growing number of tech startups.
Earlier this week, VC firm Transition VC closed its maiden fund at INR 700 Cr over two years after its launch.
Overall, funds worth over $12.1 Bn were launched for the Indian startup ecosystem in 2025, up 39% from 2024. Around 58% of these funds are targeted at early stage startups, while growth and late stage vehicles also picked up momentum. Of these, fintech, consumer, and AI led sectoral interest for investors – fintech accounted for about 16% of the corpus, followed by consumer (15.5%) and AI-focused funds (12%).
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