India Quotient Launches $80 Mn Fund To Invest In D2C, SaaS Startups

Mumbai-based early-stage venture capital firm India Quotient recently announced the launch of the fourth fund where it is looking to raise $80 Mn to invest in direct-to-consumer (D2C), enterprisetech, edtech, fintech and social media startups. 

The VC firm said that it is looking to raise at least half of the capital from domestic investors, particularly family offices, and remaining from global investors, for supporting close to 35-40 startups in the coming months. While India Quotient did not reveal the exact timelines, it said that it is optimistic about closing the round with its existing set of LPs. 

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 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. 

Founded by Madhukar Sinha and Anand Lunia in 2012, India Quotient has invested in startups such as D2C beauty brand SUGAR Cosmetics, audio content platform Kuku FM, digital lenders LoanTap and Lendingkart as well as startups such as Fleetx, Sharechat, WebEngage, Faballey among others. Lunia had earlier told us that the firm has finalised over 77 investments in total and has seen 11 exits, including Grabhouse, Holachef, Belita, Clip App among others.  

“We are expanding our global investor base and will work with about 20 family offices in India. These business houses bring us credibility, access to markets and insights, which will give us access to investments that were hitherto available only to overseas money,” Sinha said. 

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. 

These are great signs for the startup ecosystem, given the state of the market in 2020 and the fact that early-stage startups have attracted funding in a tough time proves that even investors have seen the value in the innovation.

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%.