Indian early-stage venture capital investor 3one4 Capital on Monday said it has raised $200 million for its fourth fund to back startups in sectors including consumer Internet, SaaS, and fintech.
3one4 Capital, which has investments in Open, BetterPlace, Jupiter, KukuFM, Koo, Dozee, and Tracxn, said the fund was oversubscribed to $250 million, but the accepted amount was reduced to $200 million to maintain its intended size.
The firm said it aims to invest in early-stage startups with larger cheque sizes, ranging from pre-seed to Series A, with cheques between $500,000 to $5 million. The median cheque size for these investments will be in the $1.5-3 million range, and the firm will also be looking at post-seed and pre-Series A funding rounds.
Even as there has been a slowdown in fundraising by Indian startups, early-stage startups (pre-seed to Series A) kept the momentum going by recording a 20% growth in value in the Jan-Mar quarter of 2023, according to data from DealStreetAsia’s India Deal Review Q1 2023 report.
There has also been a rise in interest by India-focused funds in the Indian startup ecosystem. Last week, Myntra and Lenskart backer Chiratae Ventures hit the final close of its ‘Growth Fund I’ at $122 million. In February, Iron Pillar, a venture growth investor that backs technology companies in India, was reported to have raised at least $128.83 million for its second fund so far.
Founded by Pranav Pai and his brother Siddarth, 3one4 Capital’s Fund IV will be the sixth fund raised by the firm. In total, the firm will manage $510 million of committed capital and over $750 million in assets under management. The cumulative market cap of the companies in the portfolio is over $7.5 billion, the firm said.
The first close of Fund IV was completed in March 2023, and over five deals have already been approved or invested in. The final close is expected by the end of Q1 2023, the firm said, adding that Fund IV has over 90% institutional investors.
3one4 Capital said notable investors include India’s three systemically important banks, five of India’s largest listed banks by market cap, eight of India’s leading mutual fund operators, leading US university endowments, global sovereign funds, global corporations and insurance companies, India’s leading corporations, and a selection of India’s largest family offices.
“We will double down on India-specific businesses, given our lessons from market leaders such as Licious, WeRize, and KukuFM and will remain bullish on India’s consumption patterns. We also plan to continue deploying more capital into cross-border SaaS investments, given our positive experience partnering with leaders like DarwinBox, BetterPlace, and others,” said Anurag Ramdasan, partner, 3one4 Capital.