Early-stage firm Prime Venture Partners today announced the close of its fourth fund of $100 Mn, with a first close of $75 Mn (INR 556 Cr). The fourth fund will look to make at least 20 new investments in the next few years with a ticket size of around $1-2Mn.
Prime Venture’s fourth fund saw investments from international Limited Partners (LPs) including international Finance Corporation (IFC), part of the World Bank Group, a top-tier university endowment, several returning family offices and institutions, and numerous global technology entrepreneurs.
The VC firm had raised its last fund of $72 Mn in 2018, the second fund of $46 Mn in 2015 and an $8 Mn first fund in 2012. It will continue to focus on being the first institutional investor, maintaining its focus on both consumer Internet and B2B startups.
Prime Venture’s funds I and III had earlier committed across 32 companies spanning sectors such as fintech, healthcare, SaaS, education and logistics. Most of these companies have gone on to multiple strong follow-on rounds of investment from other leading institutional investors in India, Silicon Valley and Asia.
In addition to existing focus areas of fintech, edtech, healthtech, consumer Internet and SaaS, the firm expects to expand into new areas, notably Decentralised Finance (DeFi), crypto, electric vehicle and gaming infrastructure platforms. Prime also announced that it is actively looking to expand its leadership team by adding a fourth partner.
“Prime has both the conviction and competence in early-stage investing and we aim to back companies that will lead this once-in-a-generation transformation. We see ourselves continuing to build Prime as the top-choice partner for early-stage entrepreneurs who are building category-defining companies and seek not only financial capital but also an active investor with deep conviction,” said Amit Somani, managing partner, Prime Venture Partners in a statement.
A Quick Look At Prime Venture Partners
Founded in 2011, Prime Venture Partners mainly invests in early-stage technology startups in India and is focused on companies that have an innovative approach to solving fundamental problems through technology. The Bengaluru based fund is led by Sanjay Swamy, Shripati Acharya and Amit Somani along with partner emeritus, Raj Mashruwala.
Prime Venture is typically the first institutional investor in its portfolio companies and participates in either seed or pre-series A rounds. Besides seed funding, Prime Ventures also focuses on mentoring through strategic partnerships with VCs. The firm follows a model of being highly selective and invests in only 5-6 companies a year.
Some of the notable investments by Prime Ventures include lending platform MoneyTap, invoice discounting platform KredX, expense management software Happay, logistics and supply chain startup WheelsEye, digital transactions tracker Recko and neobanking company NiYO, among others.
In the areas of healthtech, it has invested in AffordPlan and Maya, while in the Saas and enterprise space it has invested in HackerEarth, Synup, Nimble Wireless, Tracxn, and mobile-based security management solution myGate, among others.
While most of Prime’s portfolio companies are focused on the booming Digital India opportunity, Prime also has several companies that target the US, Middle-East and other International markets, or that initially start in India and expand from India to other geographies.
The VC firm was the first investor in ZipDial, a missed-call based startup that was acquired by Twitter in 2015. ZipDial is also the VC firm’s most well-known exit and the fund hopes to make more in the coming few years. In March, Prime had exited its investment in retail tech startup Perpule after the startup was acquired by American ecommerce giant Amazon for INR 107.6 Cr (about $14.5 Mn). One of its portfolio companies Tracxn had recently filed its draft red herring prospectus (DRHP) with market regulator SEBI to offload up to 3.86 Cr equity shares via a domestic IPO.
Until recently, the biggest exits in the Indian VC ecosystem was led by mergers and acquisitions and secondary funding deals. However, this is expected to change with a growing number of startups looking to go public and as more early investors exit from these IPOs.
Speaking to Inc42, Prime Venture’s managing partner Somani said that India’s startup ecosystem is headed towards a fresh funding boom in the near future as the money from the upcoming IPO-led exits flow back into VC’s who had taken early bets in Indian startups. However, he added the next funding boom will largely focus on business models that show signs of positive unit economics and an indication of real revenues at an early stage itself.
“I think the dark spot in the Indian VC ecosystem is the lack of viable exit options. The plethora of startups who are going public in Indian exchanges will surely provide more exit options for VCs going forward. We are also seeing a rise in large funding rounds which may also provide partial exits to early existing investors. I also think there will be a lot more acquisitions as more privately-funded startups go public,” added Somani.