PROMAFT Partners INR 1,000 Cr maiden fund will invest in startups with proven product-market fit
The fund will be sector agnostic and plans to invest in 10-12 startups
The fund is backed by leading family offices, Paytm's Vijay Shekhar Sharma, and founders of startups like Zomato, PharmEasy, Livspace, VideoVerse, and Browserstack
Former investment head of Alibaba Group India, Raghav Bahl, and former partner at 9Unicorns (now 100Unicorns), Soham Avlani, have launched a new venture capital firm PROMAFT Partners.
The VC firm announced INR 1,000 Cr maiden fund to invest in startups with proven product-market fit.
Bahl and Avalani have assumed the roles of founding general partners at the VC firm.
The fund will be sector agnostic and plans to invest in 10-12 startups. Bahl said that the fund will look to make two to three investments per year.
In a statement, the VC firm said its fund has been backed by leading family offices in India, Paytm’s Vijay Shekhar Sharma, and founders of startups like Zomato, PharmEasy, Livspace, VideoVerse, and Browserstack. The founders of the aforementioned startups will also act as mentors for the fund’s portfolio companies.
“We encourage our entrepreneurs to grow slowly, while investing in the core fundamentals of the business… We are backed by prudent investors which gives our entrepreneurs the advantage to build for the long term,” Bahl said.
In his prior stint at Alibaba, Bahl led the group’s investment in startups like Xpressbees, BigBasket, Paytm, Ola Cabs, Travel Triangles, among others. On the other hand, Avlani led 9Unicorn’s investments in Rezolve.AI, Hoopr, LiquiLoans, Baaz Bikes, Castler, among others.
The duo plan to utilise their investment experience to help startups in developing go-to-market and business strategy, hiring and financing. They also said that the ongoing period is ripe for investing in the Indian startup landscape, labelling it as a ‘double trophy’ investment period.
The observation was made on account of the ongoing funding winter, which has led to correction in startup valuations. In 2021, Indian startups cumulatively raised $42 Bn, a jump of 281% from $11 Bn raised in 2020. This number drastically dropped to $10 Bn in 2023. In the first six months of the ongoing calendar year, startups only managed to raise $5.3 Bn.
“We believe that this vintage encourages entrepreneurs to develop capital efficient businesses while the absence of large funds has resulted in valuations to sober down. We remain excited about this environment as it provides for a highly attractive ‘risk-return profile’ for both investors and entrepreneurs,” Avlani commented.
The new fund launch comes at a time when investors expect funding activity to pick up in the second half of the year. According to an Inc42 survey — “India’s Top Startup Investor Ranking H1 2024 Survey” — about 93% of over 50 startup investors see 2024 as a turnaround year for Indian startups.
Supporting this deduction is the launch of several new funds in recent times. Earlier this month, Suzuki Motor subsidiary Next Bharat Ventures launched INR 340 Cr fund. Last month, VC firm VentureSoul Partners launched its maiden debt fund, VentureSoul Capital Fund I, with a target corpus of INR 600 Cr.
