Chiratae Ventures closes fourth fund at $337 million

Mumbai: Chiratae Ventures, a homegrown tech-focused venture capital firm, has closed its fourth fund at $337 million, higher than the targeted corpus of $275 million, on better-than -expected response from investors.

It had raised $150 million towards the first close of the fund two years ago.

The firm, which has backed startups like Myntra, Lenskart, FirstCry and PolicyBazaar, is among the few large domestic funds with a large rupee capital.

“We have raised over half of the fund from domestic investors including family offices and industrial families from India, just like all our previous funds. Global investors include those from the US, UK, Europe, Japan and Singapore,” said Sudhir Sethi, founder and chairman of Chiratae Ventures. “All our existing LPs (limited partners) have backed the new fund with more capital commitment this time, making up for almost 75% of the capital raised.”

Across its four funds, Chiratae Ventures has cumulative assets under management of nearly $950 million.

Founded in 2006, the fund has invested in more than 100 deals and has completed 38 exits. It clocked 43% return on its investment in Playsimple when the company
was acquired by Swedish gaming firm Modern Times Group for $360 million earlier this year. Another portfolio company, Policybazaar,
recently filed draft papers for an initial public offering (IPO).

“Venture tech has consistently delivered results and it is slated to only grow from here,” Sethi said.

Chiratae Ventures’ India portfolio includes tech-focused startups such as Agrostar, Bizongo, Bounce, Cropin, Curefit, Emotix, GoMechanic, HealthifyMe, PlayShifu, Pyxis, Uniphore and Vayana.

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“We have already deployed around $100 million from the new fund across 25 companies and around $30 million is in the pipeline,” said TC Meenakshisundaram, co-founder and managing director, Chiratae Ventures.

Earlier this month, Chiratae said it would offer
a 48-hour turnaround on seed fund requests and pitches for investments that are less than or equal to $500,000, an industry-first initiative for the Indian startup world. Chiratae Sonic aims to accelerate and democratise fundraising for founders and ensure quicker access to capital, Sethi had told ET.

Sonic investments are also part of the same capital pool, he added.

A growing number of India-focused funds are raising bigger corpuses to pump into the country’s burgeoning startup ecosystem.

Some of the recent new fundraises by managers—from Alteria Capital to Tata Capital—have demonstrated how capital, both domestic and global, is chasing Indian companies. Most of these fund managers have announced bigger funds than their previous funds.

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.

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.


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