Tuesday, 2024 March 5

India-focused VC funds that closed new fundraisings in 2019 | KrASIA Year in Review

While this year Indian technology startups saw a spike of 5% year-on-year in institutional funding that reached USD 4.4 billion—driven by both venture capital firms from Indian as well overseas—a handful of VC firms also raised fresh funds this year focused at startups in Asia’s second-largest economy.

Even though the industry struggled with fewer PE exits this year, VC funds have seen steady growth in exits in 2019 and reached out to their LPs with a renewed enthusiasm. A Venture Intelligence report released in August 2019 said VC firms in India are set to cash out USD 4 billion from exits this year. Apart from funds that have raised money in this last year of the 2010s, India also saw a few new funds coming out in the market led by former CEOs, IT czars, and entrepreneurs.

KrASIA lists out five VC firms that have managed to close their funding or are close to reaching their target corpus this year:

1. Accel

The 35-year-old fund is known for its Midas touch in India.

One of the pioneers and first VC funds to bet in India’s fledgling startup ecosystem back in 2005, that has since then backed more than 100 early-stage technology companies in the country, recently raised USD 550 million in its sixth India-focused fund.

Silicon Valley-based Accel was among the first investors in Flipkart—the poster child of India’s successful internet companies. It reportedly bagged USD 1 billion last year after Walmart acquired Flipkart for a whopping USD 16 billion that went down in history as the biggest acquisition of an e-commerce company.

With the new fund, Accel said it will continue to invest in early-stage companies, led by “bold and exceptional entrepreneurs,” which it calls ‘Originals’. Although it has invested about 40 Indian SaaS companies, most of its portfolio companies are technology-led consumer startups.

It has invested in companies such as food delivery unicorn Swiggy, Hyderabad and California-based SaaS company Freshworks, ticket-booking platform BookMyShow, in-home healthcare services platform Portea, gaming company Mech Mocha, among many others. At least four of its portfolio companies in India have become unicorn companies—valued at over USD 1 billion—such as Swiggy, Ola Cabs, Freshworks, and Flipkart.

 2. Nexus Venture Partners

Nexus Venture believes in backing dynamic entrepreneurs. After going through its fair share of ups and downs, it’s in the market to play with the fresh dough.

One of the early backers of online marketplace Snapdeal, India- and US-based VC fund Nexus Venture Partners has raised funds to the tune of USD 353.5 million from a set of 32 investors for its fifth fund, according to the filings with the US Securities and Exchange Commission.

Nexus Venture’s fifth fund still needs USD 96.5 million to reach its target of USD 450 million, which it has been pursuing since last year.

The 13-year-old firm has lately seen its investments gone sour, except a few such as logistics unicorn Delhivery, food delivery company Zomato, and data management company Druva which was valued at over USD 1 billion during its recent fundraise of USD 130 million. While it had to write-off its investments in a few companies such as homestay aggregator Stayzilla and food delivery company Tinyowl, its portfolio companies such as Housing.com, ShopClues, and Snapdeal saw their valuations tumble down. Valued at just over a billion dollars in 2016, ShopClues reportedly got acquired for USD 100 million by Singaporean e-tailer Qoo10 in October this year.

Nexus Venture Partners has seen some successful exits as well, which includes Flipkart’s acquisition of MapMyIndia, design and software development firm Mistral getting acquired for USD 26 million by engineering services company Axiscades, among others.

3. Vertex Venture Holdings

Known for helping companies with not just money but one-to-one assistance as well, Vertex Venture Holdings is in the market with fresh funds.

Singapore-based early-stage investment fund ‘Vertex Ventures Southeast Asia and India’ announced earlier this year the final close of its fourth fund at USD 305 million. The fund is focused on early-stage technology startups from India and Southeast Asia.

“Historically, one-third of our portfolio companies are from India, and we think this can increase significantly based on the opportunities we discover with the recent fund we raised,” Ben Mathias, managing partner, Vertex Ventures SEA & India, told KrASIA.

Vertex Venture largely invests in the Series A round of a company’s funding journey. It has till now invested in companies such as baby products retailer FirstCry, home services company HouseJoy, fresh food company Licious, logistics company Xpressbees, and social commerce company Glow Road, among others.

While it has invested in spaces such as fintech, enterprise, and consumer tech, it’s looking at companies that make products tailored at the next 500 million users from tier 2,3, and 4 cities. It sees businesses based on vernacular content doing spectacular in the coming years and is betting big on social commerce.

Till now it has made a few exits in the India market that includes travel company Yatra’s listing on the American stock exchange Nasdaq in 2016 and the acquisition of its SaaS company CloudCherry by Silicon Valley-based Cisco earlier this year.

4. 3One4 Capital

The three-year-old fund claims to be biased towards “providing best resources to help startups deliver audacious results.”

Bengaluru-based venture capital firm 3One4 Capital, floated by the sons of Mohandas Pai, former CFO of IT behemoth Infosys, has managed to close two funds this month.

Pranav Pai and Siddharth Pai, the managers of 3One4 Capital closed the first fund called ‘Continuum I’ at USD 56 million which will focus largely on Series B round and invest anywhere between USD 3 to 5 million. “With large strategic and financial institutional investors entering the funds, we have an excellent set of minds who bring unparalleled advantages to the firm and its portfolio companies,” Pranav Pai, managing partner, 3one4 Capital, told local media Business Line.

The second fund aptly named ‘Rising I’ is dedicated to seed-stage companies and closed the round in December at USD 6.5 million. Through this fund, 3One4Capital will put in USD 100,000 to 500,000 in companies that are in idea and seed-stage. It should be noted that both the funds have been oversubscribed compared to the amount they intended to raise initially.

3One4Capital has till now invested in over 50 startups including fresh meat delivery company Licious, Betterplace, peer-to-peer lending company Faircent, online media company YourStory, and data tracker Tracxn.

5. Chiratae Ventures

Formerly known as IDG Ventures India, the fourth fund of Chiratae Ventures is close to completing its mandate of USD 275 million. Local media Mint citing sources said the fund has managed to raise 60% of its target with most of the money coming in from Indian investors that include industrial houses and family offices.

For its previous funds, it has managed to get funding from International Finance Corporation (IFC) and Cisco Investments. In September this year, IFC announced a commitment of USD 20 million for Chiratae Ventures’ fourth fund.

An early-stage investor in India that has been backing startups since 2006, has had 14 exits so far in the country. Its portfolio companies include two-wheeler renting startup Bounce, health-tech startup Cure.Fit, agri-tech company AgroStar and Cropin, among many others. It has invested in a vast array of sectors including logistics, e-commerce, SaaS, fintech, health-tech, and fashion.


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