Pentathlon Ventures Launches INR 450 Cr Fund

SUMMARY

The fund aims to invest in 25 B2B SaaS startups in the B2B SaaS space

It will focus on sectors such as enterprise digital transformation, ecommerce enablement, fintech, vertical SaaS, applied AI, sustainable tech and healthtech

Founded in 2020, Pentathlon Ventures has invested in 23 startups through its first fund

Early stage B2B SaaS-focused venture capital firm Pentathlon Ventures has announced the launch of its second fund, Fund II, with a target corpus of INR 450 Cr.

The fund aims to invest in 25 B2B SaaS startups across sectors, including enterprise digital transformation, ecommerce enablement, fintech, vertical SaaS, applied AI, sustainable tech and healthtech.

Founded in 2020, Pentathlon Ventures has backed 23 startups, including Deeptek, Rezolve, Spyne, Dista, TurboHire and ShopSe, among others, through its first fund. It had launched its first fund in 2021 with a corpus of INR 76 Cr.

Commenting on the fund’s investment thesis, Pentathlon Ventures’ managing partner Sandeep Chawda said, “The revenues coming from India-based B2B startups are expected to grow 25X in the next 8 years. With an impressive 50% faster time to revenue, better revenue predictability, and solid gross margins ranging between 70-80%, it presents extraordinary prospects of building sustainable businesses. In addition to these aspects, with our core expertise being in this space, early stage B2B SaaS companies built in India continue to be our primary investment thesis.”

For Fund II, Pentathlon Ventures is raising capital from a mix of domestic and global limited partners.

Speaking on Fund II, Pentathlon Ventures managing partner Gireendra Kasmalkar said, “A couple of decades back, India was known for offshore IT services. Later, B2C startups gained prominence because of India’s population/consumption story. Today, Indian B2B startups are on their way to becoming global leaders within this decade. Add to this the tailwinds from the global focus moving to India. We are truly on the cusp of a huge virtuous cycle.”

The VC firm’s fund launch comes when Indian startups have been struggling with a funding shortfall for the past 18 months or so, and not for a lack of funds available to investors. Per an Inc42 survey, which surveyed 70+ active VC firms in India, Indian VCs have only invested 26% of the capital they have accumulated and allocated for FY24, holding on to the rest.

To be sure, investors in India have launched or announced funds worth nearly $4 Bn since the start of 2023. Some of the latest fund announcements include MIXI’s $50 Mn CVC fund, CapFort Ventures’ INR 400 Cr fund and Good Capital’s $50 Mn fund, among others.