India Quotient Closes Its Third Fund At $60 Mn To Invest In B2B, SaaS Startups

After making the first close of its third fund in April 2018 with $30 Mn, Venture capital firm India Quotient has made the final close of its $60 Mn fund.

The fund saw investments coming in for the first time from a large Chinese fund, few angel investors from China, and some large family offices who did not wish to be named. Other limited partners (LPs) include MakeMyTrip’s CEO Deep Kalra and Paytm’s founder Vijay Shekhar Sharma.

Additionally, the fund was also backed by India Quotient’s existing investors such as Gulf-based Indian business tycoon B.R. Shetty, Flipkart’s cofounder Binny Bansal, and Singapore-based family office of Rajesh Bothra RB Investments.

According to a Livemint report, India Quotient, which has invested during the early stages of startups such as vernacular language social network ShareChat and fintech startup Lendingkart, is also planning to raise an additional $40 Mn opportunities fund to invest in its existing top-performing startups. With a total $100 Mn in the bank, the venture capital company plans to deploy it over the next two years.

With the primary funds, the venture capital company is planning to invest in 20 early-stage startups, with the first cheque between $250K to $1 Mn and will seek 15%-20% ownership in them.

Anand Lunia, the managing partner at India Quotient, said that the fund’s strategy is going to differ a bit from its earlier ones which majorly focused on consumer internet. This time it plans to invest more in B2B and enterprise software startups. “Small business in India now needs technology to help with compliance. These businesses are already comfortable with storing data on the cloud, making it an emerging opportunity,” he was quoted as saying.

India Quotient Growing At Each Step

While most funds of venture capitals, early-stage investors such as Matrix, Nexus and SAIF Partners have kept the fund sizes the same for stability, India Quotient has been successful in raising subsequent larger funds to emerge more competitive in an era of abundant capital.

The Mumbai-based venture capital has grown from $5 Mn fund in 2013, to its second fund amounting to $16 Mn in 2015, and is now in its current $60 Mn fund with a chance of raising additional $40 Mn opportunities fund.

Lunia said that with a $60 Mn primary fund and the $40 Mn opportunities fund working in tandem, India Quotient will now be able to support its companies much longer in their journey.

Last year, India Quotient earning 25X of the investments from ShareChat made its largest exit. The company at that time sold its stake worth INR 50 Cr to Chinese investment firm Hillhouse Capital.

The investment company had also made an exit from job portal iimjobs.com and sold its stake worth INR 81 Cr to InfoEdge in May 2019.

Lunia said that companies like Loantap, Lendingkart, Sugar, Coolberg and Lokal have been a great draw for coinvestments.