The investors or limited partners in the new fund include World Bank’s International Finance Corporation, University Endowment, several family investment offices and institutions, and global technology entrepreneurs. The fund declined to disclose the details of its other LPs.
“We look forward to closing the fund in a few months,” said Shripati Acharya, cofounder and managing partner at Prime Venture Partners.
The Bengaluru-based VC fund, which typically invests $500,000 to $1 million, might increase the ticket size with the fourth fund amid
record fundraising by Indian startups. About $20.76 billion has been raised across 583 deals by Indian startups as of August 20, ET reported on August 23, citing Venture Intelligence data.
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Prime Venture Partners raised its third fund of $72 million in 2018, its second fund of $46 million in 2015 and its first fund of $8 million in 2012.
These are committed across 32 companies, including security and community management platform MyGate, healthtech startup MFine, remote patient-monitoring startup Dozee and neobank Niyo.
“We have earmarked half of the new fundraise for new investments while the remaining will go towards supporting those companies with follow-on capital,” Acharya said. “You will start seeing exits from our vintage funds in the next couple of quarters.”
Prime Venture Partners was started by Acharya and Sanjay Swamy in 2012. In 2015, Amit Somani joined as a partner. The fund is now looking to add one more partner to beef up its top management.
The Bengaluru-based firm typically invests in sectors such as fintech, edtech, healthtech, consumer internet and global software as a service. With the new fund, Prime expects to expand into new areas, notably decentralised finance (DeFi) in the cryptocurrency space, electric vehicles and gaming.
“The rapid pace of digitisation in the last couple of years has brought these sectors into focus and we believe that they will see tremendous growth going forward,” Acharya said.
Venture Capital boom
Prime’s new fund comes at a time when a growing number of India-focused funds are raising bigger corpuses to pump into the country’s burgeoning startup ecosystem. The increase in deal flow is primarily led by significant liquidity in the venture and hedge fund ecosystem. Many investors are gravitating towards high-quality deals leading to large funding rounds in these sectoral leaders, which is leading to larger cheques.
Buoyed by the liquidity rush, a lot of domestic and India-focused dollar funds are on the road to raise follow-on, larger funds. Funds backing early-stage startups are finding more takers.
Funds such as Chiratae Ventures, Iron Pillar, Avataar Venture Partners, Avendus Capital, India Quotient, Orios Venture Partners, Inflexor Ventures, Alteria Capital, Trifecta Capital, IIFL Special Opportunities Fund are among those that have either recently closed or are in the process of raising a larger India-focused fund.
According to Bain & Co.’s
private equity and venture capital report released earlier this year, a $6 billion corpus is waiting to be invested in the Indian market. This, the global consultant said, would result in strong investment activity going forward into 2021 and beyond.