Consumer-focused early-stage venture capital firm Sauce.VC, which has backed the likes of Mokobara and The Whole Truth, has closed its third pre-seed fund at Rs 365 crore ($44 million).
The final close comes months after Sauce.VC floated the fund, with a target corpus of Rs 250 crore.
The fund said 95% of the LPs are domestic and include top consumer-focused family offices, funds of funds, corporates, and HNIs. Some of the names include the Chona family, Kris Gopalakrishnan Investment Office Pratithi Investment, Mirabilis Investment Trust, Sarda Group, Singularity Ventures, and Saison Capital among others.
Sauce.VC claims it received incoming demand for over Rs 700 crore within four weeks of launch but decided to scape it down to Rs 365 crore.
“We were unable to accommodate a lot of new investors as we had to prioritise existing LPs. While it is tempting, we decided not to accept more capital than we can deploy in a disciplined way while staying true to our stated strategy,” Manu Chandra, Founder and Managing Partner of Sauce.VC, said in a statement.
“The demand is a reflection of investor interest in backing new consumer brand businesses given India’s strong domestic consumption thesis and a proven track record of exits in the sector,” Chandra added.
Sauce.VC launched its first fund in 2019 with a target corpus of Rs 60 crore. It launched its second vehicle in 2021 with a fund size of Rs 158 crore. In 2023, it also launched a Sauce Continuity Fund which was closed with a corpus of Rs 263 crore.
Sauce’s latest fund takes its total assets under management to Rs 850 crore. They claim to have returned cost back on Fund 1 with a holding period of just two years for LPs.
Fund 3 will invest the first cheques of Rs 5 crore in 12-15 companies and continue its concentrated strategy with 75% of the fund reserved for follow-ons into select winners. The fund has already completed three new investments which will be announced shortly in the veterinary clinics, baby gear, and ayurvedic children’s wellness space.
To date, the firm has invested in 23 companies from its funds. Some of its other investments include XYXX Innerwear, Innovist, Supertails, Hocco Ice Cream, Hoovu, and MyMuse.