Mumbai-based early stage venture capital India Quotient today announced that it has raised $64 Mn for its fourth fund. The fourth fund was launched in Feb 2021 with an aim to build a corpus of $80 Mn from domestic and global allocations. The domestic leg was hugely oversubscribed and the fund is in discussions with global investors for the rest of the money.
The closure comes after the founding duo of Madhukar Sinha and Anand Lunia have completed 5 successful career investment cycles till date.
The fund has been raised from top family offices and other institutional investors in India. Founded in 2012, the VC has backed startups like ShareChat (now a unicorn), Sugar Cosmetics, Lendingkart, PagarBook and more than 80 early stage startups over the last 8 years. The fund has returned the principal investment on its previous schemes to investors.
Anand Lunia, founding partner, India Quotient said, “We will continue to push the boundaries in early stage investing and take positions in things that are not waves yet and spaces that are not sectors yet. While everyone has been talking about investing in returning founders, we feel that great innovation sometimes needs freshers, youngsters and first-time entrepreneurs.”
Lunia added that a small fund allows India Quotient to focus on concept stage investments and aim for high fund multiples. India Quotient wants to keep its investor base small to have a meaningful relationship with each of them. Prior to this, India Quotient had closed a $60 Mn for its third fund, where it saw investments coming in from large foreign funds and angel investors, and homegrown family offices. The third fund also saw other limited partners (LPs), including MakeMyTrip, CEO Deep Kalra, Flipkart’s Binny Bansal and Paytm’s founder Vijay Shekhar Sharma, and Singapore-based family office of Rajesh Bothra RB among others.
Lunia further added, “Today, Indian families and HNIs are directly engaging with VC firms, a great sign of wealth creation within India in times to come. Hitherto all gains made by startups were going only to overseas investors. Many of our investors have made direct investments in companies like Sharechat, Sugar, Lendingkart among others and we clearly see the increasing sophistication they now have in managing their startup portfolios.”
India Quotient also welcomed Gagan Goyal, an ex-entrepreneur and IIT Bombay Alumnus, as a general partner in the team along with Lunia and Sinha. Goyal has been an active angel investor prior to joining India Quotient, having backed nearly 20 well-known startups with 5 exits to date.
“We look forward to investing in startups that are not merely copycats of global companies but have a unique concept and a real potential to scale. We have noticed that entrepreneurs today are looking for more than investors. They want partners who are committed long and deep, a value that India Quotient has upheld since day 1,” said Goyal, General Partner, India Quotient.
India Quotient is sector agnostic and has invested in fintech, edtech, healthtech, SaaS, social networks,agri-tech and consumer tech sectors.India Quotient typically gives out the first cheque for a startup backing them with funds from $250K-1.25 Mn.
According to data from the annual Indian tech funding report by Inc42 Plus, early-stage startups attracted the investor’s eye in a big way in 2020. The total capital raised at the seed stage in 2020 was $403 Mn, which is close to double of the $255 Mn raised at this stage in 2019. Bridge stage funding accounted for $221 Mn in 2020, almost 3x the $98 Mn raised in 2019.
India Quotient was among the top 10 most active early-stage VCs in India last year, participating in over 20 deals. For seed-stage startups, the funding amount increased by 58% year-on-year (YoY) and the deal count increased by 22%. For bridge stage startups, the funding amount increased by 125% and the deal count by 90%.