3one4 Capital — an early stage venture capital firm that primarily invests in technology companies — expects to fully tie up commitments for its latest fund of over USD 100 million corpus during the current quarter.
Anurag Ramdasan, Principal – Investments at 3one4 Capital said that there has been “overwhelming interest” from global institutions into investing in India as the pandemic underscored the true potential of technology and digital firms.
Technology-backed startups offered a “phenomenal alternate” for customers amid complete lockdown last year, he noted. Ramdasan said the latest fund has evoked a strong response and 3one4 Capital expects it to be fully subscribed “very soon”. 3one4 Capital’s new fund had seen more demand than anticipated and is now very close to clinching over USD 100 million commitment from investors.
The fund, like the past ones, would continue with the strategy of making 8-12 investments annually, he told PTI. Elaborating on the latest fund, Ramdasan said that the ‘first close’ was in September 2020, when the initial commitment for the fund came in.
“Typically, if you raising USD 100 million you will split it across one, two or three closes. In the first tranche, you close the initial corpus which varies from fund to fund, but anywhere from 20 up to 50 per cent of the corpus, and then in the subsequent closes you clear the entire amount,” he explained.
The interest this time has come from Indian family offices, domestic institutions, as well as large MNCs.
“We are almost there, more or less fully done,” he said adding 3one4 Capital hopes to close the fund with corpus of over USD 100 million in July-September quarter.
Previously, the contributors to the funds were predominantly family offices, but now large institutions are also jumping in, he observed.
“Whether it is startups or venture funds, there has been overwhelming interest from global institutions into investing in India. That remains the same for VC fund, especially for funds like us. As our earlier funds have performed fairly well, investors from across sectors are looking at us,” he said.
Digital companies are operating in “very interesting times”, and the same is true for venture funds investing into digital companies. Pandemic has spurred the digital adoption and, in turn, increased investor appetite for start ups, he noted.
Disbursals from the new fund have begun and over 10 investments have been made so far. 3one4 Capital has three funds in the seed stage, one in early seed stage and one 3one4 Capital opportunities fund, across which it manages a little under a quarter billion dollars.
3one4 Capital has over 50 companies in its portfolio, and its notable investments include Licious, Bank Open, DarwinBox, Betterplace, Koo, Dozee, Breathe Well Being among others. The latest fund is focused on ticket size of up to USD 2 or 3 million, and primarily into technology startups.
“With this fund what we get is the ability to write larger investment cheques, and that is what we will be going after. We will be investing more into companies in early stage,” Ramdasan said.