Venture capital firm India Quotient, which had previously backed startups like regional language social platform ShareChat, fintech startup Lendingkart, and online fashion store FabAlley amongst others, has closed its third fund worth USD 100 million.
“The primary fund was USD 60 million only. Once we completed that we raised USD 40 million to invest in our mature companies. We will be able to invest USD 3-4 million per company in their Series B and C rounds,” Anand Lunia, managing partner, India Quotient told local newspaper Financial Express. The total funds will be deployed over the next two years.
Those who participated in the funding round include Gulf-based Indian billionaire Bavaguthu Raghuram Shetty, Flipkart co-founder Binny Bansal, and Singapore-based family office of Rajesh Bothra—RB Investments. New investors range from a large Chinese fund, prominent Chinese entrepreneurs also known as super angels, and a few family offices who did not want to be named. Other lending partners who made up in the assortment of investors included MakeMyTrip’s Deep Kalra and Paytm founder Vijay Shekhar Sharma.
The fresh fund is to be invested in 30-35 companies overall. The USD 40 million opportunity fund will back 10 mid-stage startups, whereas the remaining USD 60 million primary fund will be invested in seed-stage startups with the investment allocation between USD 250,000 to 1 million for 15-20% ownership. Looking at the history of the funding exercises at India Quotient, its first fund saw an infusion of USD 5 million in 2013 and two years later the second fund pulled in USD 16 million.
India Quotient has backed 60 startups so far and it has 10 startups in its kitty which are Series B funded, while 25 of its portfolio companies have closed operations. In its strategic decision to support matured stage start-ups, its exits are expected to happen faster, with the waiting period being reduced to about four to five years.
Earlier, India Quotient bet largely on consumer focused internet companies, but is now shifting its focus to business-to-business and enterprise software startups. The firm already has five SaaS startups including business accounting platform for small businesses Vyapar and enterprise platform for digitization Shephertz as its portfolio companies. It has now partnered with Kotak Wealth Management to market the fund to Kotak’s clients. Lately it has also invested in podcast platform Kuku FM and Lokal, a regional language news aggregator and classifieds platform.
“Companies are able to access more customers, payments have become simpler, infrastructure has become better – all of this has made the India consumption story very strong,” Prerna Bhutani, partner, India Quotient told financial news provider VCCircle.
In 2018, it exited from its ShareChat investment with 25X return when Asian investment firm Hillhouse Capital bought a part of its share for USD 6.9 million.