SUMMARY
The fund will support ‘innovative technology companies within traditional industries’ to support sector development
This is Vertex Ventures’ fifth India and SEA-focused fund and is now pegged at $500 Mn
Vertex Ventures marked its debut in the country with its first India and SEA fund back in 2010.
DEG, the investment arm of German state-owned development bank KfW, will reportedly invest $18 Mn in venture capital (VC) firm Vertex Ventures’ latest SEA and India Fund V.
Regulatory filings seen by Nikkei Asia said that the investment will be deployed towards promoting growing businesses in the SEA region with a high developmental impact.
“The investment will be used to promote growing businesses in the region with high developmental impact, thus creating demand for qualified labour and contributing to the local tax base,” DEG said.
As per the German investment firm, the Vertex Ventures’ fund will largely be used to fuel ‘innovative technology companies within traditional industries’ to support sector development and improve resource utilisation.
This comes nearly three months after it was widely reported in November that the VC firm had already secured commitments worth $300 Mn to $400 Mn from multiple institutional investors. Of this, Singapore’s sovereign fund Temasek reportedly contributed $100 Mn as an anchor investor.
While it was earlier reported that the Singapore-based VC firm was vying to raise up to $400 Mn for its SEA and India Fund V, it has now emerged that Vertex Ventures could be looking at a target of $500 Mn.
This is not the first time that Vertex Ventures has raised a mammoth India and SEA-focussed fund. In 2019, it closed a $305 Mn Fund IV focussed on early-stage tech startups in the region. In 2017, it closed its SEA III fund at $210 Mn.
Vertex Ventures marked its debut in the country with its first India and SEA fund back in 2010. It followed it up with the close of the second round of the fund in 2014, funded fully by Temasek.
The VC firm claims to have more than $1 Bn under management and over 78 startups under its belt across the globe. Its current India portfolio includes D2C meat and seafood unicorn Licious, two-wheeler marketplace BeepKart, fintech platform Kissht, and audio streaming major Kuku FM, among others.
On the other hand, DEG has also scaled up its investments in India. Earlier this month, Bike Bazaar raised $10 Mn from DEG. Between 2019 and 2020, it invested in fintech startup LivFin in multiple tranches.
The report comes close on the heels of multiple developments that point towards investors accumulating even more dry powder, especially in India. Indian startups have been facing a funding crunch as investors have become wary of raging market volatility and increasing macroeconomic pressures.
Hours ago, Singapore-based Grayscale Ventures announced the first close of its $20 Mn micro-fund at $10 Mn. Earlier today, the Indian Institute of Technology Madras said that it will create an INR 100 Cr fund to fuel student and faculty-led startups and spur entrepreneurship.
Last week, Small Industries Development Bank of India (SIDBI) announced its foray into the venture debt space.
