Venture capital firm 3One4 Capital, backed by former Infosys senior executive TV Mohandas Pai, has raised ₹445 crore across two funds, indicating a continued interest in early stage investing in the Indian startup ecosystem.
It has raised Rs400 crore for an opportunity fund – Continuum I, targeted at investing selectively in the best performing companies from 3one4’s portfolio; and a Rs45 crore seed stage fund – Rising I – for fresh investments, said Pranav Pai, founding partner, 3one4 Capital.
Mint reported on 6 February that 3one4 is raising a ₹350 crore opportunities fund. This fund has now been oversubscribed to ₹400 crore.
Continuum will write cheques between $3-5 million in existing portfolio firms in their Series B rounds and beyond, while Rising could invest from $100,000 to $1 million as the first cheque (seed) in a startup.
The new limited partners (LPs), or investors in the fund, include Emory Investment Management, a large US endowment that manages the assets of Emory University, Emory Healthcare and The Carter Center, Sojitz – a leading Japanese corporation, Catamaran Ventures- former Infosys CEO Narayana Murthy’s private investment arm, and Infina – a private investment company owned by the Kotak family, besides other Indian institutions and family offices.
“At 3one4, we firmly believe that the Indian startup ecosystem has achieved critical mass and now supports the development of market-leading businesses at scale. These companies combine deep domain expertise, sustainable competitive advantages, and uncompromising customer experiences to build a gravity well around themselves,” said Siddarth Pai, Managing Partner of 3one4 Capital.
The firm is managed by the brothers- who are sons of TV Mohandas Pai.
3one4 plans to invest in automation, media and content development, fintech and health. Other new sectors it is looking at include agri-tech and logistics, Pranav Pai said.
Its current portfolio includes meat delivery firm Licious, Open neo bank- a digital banking firm, and Darwinbox, which helps manage employee lifecycle in an organization.
3one4 raised its first fund of ₹100 crore in 2016, and a ₹250-crore second fund in early 2018.
A number of domestic and international venture capital funds are currently busy mopping up India-focused early stage funds.
Accel, an early backer of startups such as Flipkart, Swiggy and UrbanClap, raised $550 million for its sixth India focused fund earlier this month. Similarly, India Quotient, an early backer of startups such as regional language social network ShareChat and digital lender Lendingkart, has closed its third fund of $60 million and is raising a $40 million opportunities fund, Mint reported on 20 November.
The fundraise also indicates a largely positive environment for startups and investors in India for most of this year, although driven only by a few select investors. Mint reported on 20 October that the economic slowdown in India and global macroeconomic uncertainty seem to have prompted venture capital (VC) investors to take a cautious approach after pumping in record amounts of capital so far this year.