SUMMARY
DVC has raised INR 110 Cr as part of its first close and plans to close the entire fund in the next 4-6 months
The B2B enterprisetech fund has a green shoe option of INR 140 Cr and plans to invest in 15-18 startups over a four-year period
The fund has so far invested in five homegrown enterprisetech startups over the past 12-14 months including Disprz, IntelleWings, BluSapphire, among others
The Dallas and Hyderabad-based venture capital (VC) firm Dallas Venture Capital (DVC) has announced the first close of its INR 350 Cr India-focused fund for enterprisetech startups.
While it has raised INR 110 Cr as part of its first close, the VC firm plans to close the entire fund in the next 4-6 months. The B2B enterprisetech fund has a green shoe option of INR 140 Cr and plans to invest in 15-18 startups over a four-year period.
The fund is a SEBI-registered Category-II alternative investment fund (AIF) that has so far seen participation from India and US-based high net worth individuals (HNIs) and institutional investor IIFL.
Speaking to Inc42, Fund Partner at DVC Kiran Kalluri said that the fund was so far operating in the stealth mode and has already participated in the fundraisers of as many startups.
The fund has so far invested in five homegrown enterprisetech startups over the past 12-14 months. These include upskilling platform Disprz, anti-money laundering startup IntelleWings, transaction monitoring platform VuNet, enterprisetech player BluSapphire, and video-based sales startup Hippo Video.
With an average ticket size of $2 Mn to $5 Mn, the cross-border fund is largely focused on growth stage startups which have generated revenues upwards of $500K.
The fund was announced at a public event in Hyderabad which was attended by Telangana Information Technology Minister K T Rama Rao, DVC cofounder and managing director Dayakar R Puskoor, DVC cofounder and director Abidali Neemuchwala, and other senior bureaucrats.
“2023 is going to be a tough macro-economic environment, but global enterprises are at an early stage of the digital transformation journey. Hence, at DVC, we are very optimistic about startups helping enterprises digitally transform and solving real-world problems for them. We aim to help these startups scale their growth and reach a global forum of investors and advisors,” said DVC‘s cofounder and director Abidali Neemuchwala.
At the event, the venture capital firm also signed a Memorandum of Understanding (MoU) with Hyderabad-based innovation hub T-Hub to mentor local startups. Through the partnership, the selected startups will get access to the VC firm’s experts, networks and resources. According to T-Hub, the MoU will help the founders in increasing their efficiency and scaling their businesses.
Commenting on the announcement, Telangana Minister KR Tama Rao said, “This partnership between two promising institutions aims to make Telangana a leading IT hub… Organizations like DVC and T-Hub, with their expertise and understanding of the international market, will be able to maximize the success of startups not only in Telangana but across India.”
The announcement of the fund launch comes at a time when the space has been bogged down by its own set of challenges. Amid macroeconomic pressures and a funding winter in full swing, VC firms continue to sit on a big pile of dry powder, spending judiciously as funding dries up for startups.
As per Inc42 data, 126 new funds were launched in 2022 which raised a corpus of $18 Bn, up 300% from $6 Bn in 2021. Of these, 62 venture capital funds raised $13.9 Bn while 5 private equity funds bagged $2.5 Bn from limited partners in 2022.
While Sequoia India and Sequoia Southeast Asia closed one of the largest VC funds worth $2.85 Bn last year, Gurugram-based Elevation Capital also launched a $670 Mn fund in 2022.
The momentum has continued well into 2023 as well. Earlier this month, reports emerged that VC firm Nexus Venture Partners was also in talks to raise a $700 Mn fund to back Indian and US-based tech startups.
