AdvantEdge's Maiden Fund Reaps 11X Returns, Buoyed By Rapido Partial Exit

SUMMARY

The VC firm said that its Fund I achieved an MOIC of 11.5X, and has distributed over 3X of the paid-In capital to its limited partners

AdvantEdge’s investment in Rapido alone raked in an internal rate of return of 67% including a 111X return on initial capital

ADV Fund I was launched in 2015, with a target corpus of about $11 Mn, with a focus on seed and early-stage investments. The fund has also backed names like Chalo, Baaz and Zingbus

Mobility-focussed venture capital (VC) firm AdvantEdge Founders claims to have clocked 11X returns from its maiden fund (AdvantEdge Fund I). This came largely on the back of the investment firm’s partial exit from Rapido.

Speaking with Inc42, AdvantEdge partner Kunal Khattar said, “We have exited about $28 Mn [from Rapido] from our initial investment of close to $3 Mn. We still hold about $60 Mn of unrealised gains in our stake in Rapido.”

In a statement, the VC firm said that its Fund I achieved a multiple on invested capital (MOIC) of 11.5X and has distributed over 3X of the paid-In capital (DPI) to its limited partners. Of this, AdvantEdge’s investment in Rapido raked in an internal rate of return (IRR) of 67% including a 111X return on their initial investment.

Elaborating on this, Khattar told us the fund initially backed Rapido with an INR 2.2 Cr infusion. Following this, the VC poured in another INR 2 Cr, and then ended up investing between $2.5 Mn and $3 Mn in the ride-hailing startup in total.

“After the partial investment exit, we were able to mark up Rapido’s valuation because they raised the primary round at almost $300 Mn from WestBridge and Prosus… On the basis of that share price, we did around a $28 Mn secondary deal,” added Khattar.

ADV Fund I was launched in 2015, with a target corpus of about $11 Mn, focussed on seed and early-stage investments. The VC firm dished out cheques with a ticket size of INR 1 Cr to INR 3 Cr, with potential follow-on rounds of INR 25 Cr.

The maiden AdvantEdge fund backed 19 companies from segments such as mobility, logistics, auto ecommerce, and electric vehicles. Some of the companies that were backed by the fund include Chalo, Baaz, Zingbus and Shuttl.

Khattar also noted that the second biggest exposure in the Fund I was bus technology platform Chalo, which was valued between $400 Mn to $500 Mn in 2023.

That said, the VC firm is now raising its third fund, which is expected to see participation from all its existing limited partners as well as new backers. It is pertinent to note that AdvantEdge unveiled its third fund in 2023, with a corpus of $80-$100 Mn, to back emerging EV players.

At the heart of AdvantEdge’s new fund is India’s rapidly evolving mobility sector. The space is witnessing a big spurt on the back of growing government focus on fleet electrification, policy incentives and increasing consumer demand.

While progress has been slower for electric cars, the market for electric two and three-wheelers has soared significantly. As per Inc42, the homegrown EV market is projected to become a $132 Bn opportunity by 2030.