Matrix Partners India, an early backer of ride aggregator Ola and payments startup Razorpay, has raised $517 million so far for its fourth fund, surpassing its original $450 million target, show its regulatory filings with the US Securities and Exchange Commission (SEC).
The total corpus that the venture capital (VC) firm is now looking to raise for the fund is $525 million as it looks to ramp up investments in India’s burgeoning startup ecosystem.
In addition to the fourth fund, Matrix Partners India is also looking to raise another sidecar fund of $14.75 million, showed a separate SEC filing.
Matrix had floated its fourth fund in June 2022. It closed its third fund for India at $300 million in 2019.
The VC invests in the seed, Series A, and Series B rounds.
The development comes at a time when startups across the world are staring at a funding winter, especially in the growth stages amid macroeconomic headwinds. In the early stages, however, transactions in India have largely remained unscathed so far.
While the share of early-stage deals in total funding was a mere 7.8% in the first quarter of 2021, it hit double digits in the first quarter of 2022 and eventually grew to 24.5% in the first quarter of this year, show proprietary data collated by DealStreetAsia.
This is primarily because risk capital investors, sitting on massive dry powder, continue to chase founders with strong business ideas. Moreover, with the correction in valuations of some of these startups, investors are not hesitating to cut smaller cheques.
Among other venture capitalists that have raised capital this year, Nexus Venture Partners and Iron Pillar amassed $700 million and $129 million, respectively.
Limited partners (LPs) pumped in $2.4 billion to PE and VC firms in the first four months of this year. Even though this is almost a 30% drop from the corresponding period last year, experts are not too worried as last year LPs pumped in a record $10 billion capital in India-focussed private equity (PE) and VC firms in 2022.
Investors who are currently waiting in the wings to garner capital include prominent names such as Orios Venture Partners and Pavestone Capital.
In the private equity space, Multiples Alternate Asset Management recently made headlines for making the first close of its fourth fund at $640 million, while Xponentia Capital, and Somerset Indus Capital Partners are understood to be in talks with limited partners (LPs) currently to raise capital.