3one4 Capital’s Fund I Clocks 58X Returns From Darwinbox Bet

SUMMARY

3one4 Capital said that its Fund I clocked an IRR of 65.08% after Darwinbox’s mega $140 Mn fundraise, led by Partners Group and KKR, earlier this month

The fund said that its maiden fund achieved a “+1.0 DPI DPI” within a seven-year cycle, meaning that 3one4 Capital has fully returned principal capital to LPs

3one4 Capital, which closed its maiden fund in 2016 with a corpus of INR 100 Cr, claims to be sitting on gains to the tune of INR 400 Cr

Venture capital firm 3one4 Capital

today claims to have clocked a multiple on invested capital (MOIC) of 58X over seven years on its investment in HR tech platform Darwinbox.

In a statement, the investment firm said that its Fund I clocked an internal return rate (IRR) of 65.08% after Darwinbox’s mega $140 Mn fundraise, led by Partners Group and KKR, earlier this month.

For context, IRR measures the annualised return on invested capital over time, considering cash flows and the time value of money. MOIC represents the total value generated from investments relative to the amount invested.

The investment fund said that its maiden fund achieved a “+1.0 DPI (distributions to paid-in capital (DPI)” within a seven-year cycle, meaning that 3one4 Capital has fully returned principal capital to limited partners (LPs).

It is pertinent to note that DPI measures the capital returned to LPs relative to the total amount invested.

With this, 3one4 Capital claims that it is among the first Indian VC firms to achieve a funding-returning DPI within seven years of the Fund I’s close. The investor claims that the fund is well on track to deliver an “additional 4X multiple through unrealised value”.

“Today, we are proud to announce that Fund I has achieved a +1.0 DPI within 7 years of its final close, fully returning principal capital to investors while remaining on track to deliver an additional 4X multiple through unrealised value. This milestone places 3one4 Capital among the first Indian VC firms to deliver full capital returns within a standard venture cycle while consistently outperforming industry benchmarks,” said the VC firm in a statement.

It is pertinent to note that the 3one4 Capital closed its first fund back in 2016, with a corpus of INR 100 Cr. This means that the LPs of the VC firm could be sitting on gains to the tune of INR 400 Cr.

Meanwhile, the investor also claimed that its Fund I portfolio companies raised $67 Mn in follow-on equity for every $1 invested by the VC, translating into a total of $898 Mn in follow-on funding.

3one4 Capital also said that its maiden fund backed two unicorns (Licious and Darwinbox) and a listed company (Tracxn). The investment also claims to have realised “11 profitable exits” with four additional such deals underway. In addition, 3one4’s Fund I is said to have clocked six exits via mergers and acquisitions (M&As).

“These outcomes validate our high-conviction, structured investment strategy—studying markets deeply, identifying potential in teams early, scaling companies with sectoral depth and operational expertise, and driving high-quality exits,” added the VC firm in a statement.

The VC firm has so far also backed the likes of digital entertainment startup Pocket Aces, which was sold to Saregama, telecom startup Wiom (3one4 sold its shares in secondary deals), DoSelect (acquired by Naukri.com), Wigzo (acquired by Shiprocket), Aereo (shares offloaded in secondary transactions), Jigsaw (acquired), Oust (acquired), and Loco (acquired), among others.

This comes nearly two years after the Bengaluru-based VC closed its fourth early stage investment fund at $200 Mn in 2023.

Meanwhile, the development comes at a time when Indian investors are cashing in on returns from their exits in startups. Earlier this month, VC firm Cornerstone Ventures said that it has exited AI-powered debt collection startup CreditNirvana with more than 55% IRR.

In January, it was reported that VC firm Peak XV Partners would make INR 800 Cr on its investment of INR 80 Cr in the D2C skincare startup Minimalist, which is set to be acquired by FMCG major Hindustan Unilever (HUL) for INR 3,000 Cr.