India Quotient Returns Maiden Fund To LPs At 5.9X Multiple

Venture capital (VC) firm India Quotient has reportedly returned its first fund in cash to limited partners at a net multiple of 5.9X.

The first fund had a corpus of INR 32 Cr (around $6 Mn) and backed 21 startups, including big names such as SUGAR Cosmetics, Lendingkart and 91Mobiles.

India Quotient’s founding partner Anand Lunia was cited in an ET report as stating, “With the return of this fund, we have been able to demonstrate liquidity in a very tight market and were able to give confidence in stated numbers.” Lunia added that the return will give investors the confidence that startups have value and can give some returns in a tight liquidity market.

Founded in 2012, the VC firm generally invests in seed to early-stage startups, with a corpus of INR 1 to 15 Cr ($120K-$1.86 Mn).

India Quotient’s first sponsors include Paytm founder Vijay Shekhar Sharma, upGrad cofounder Ronnie Screwvala and MakeMyTrip founder Deep Kalra. Other investors in the first fund include Ashish Goenka, Ash Lilani, Ravi Adusumalli, Times Internet, Omidyar and SIDBI.

Its later funds onboarded foreign investors such as Capria Ventures, Nippon and Latitude Investment Management. India Quotient’s sponsors also include some Singapore-based family offices and a Chinese institutional fund.

The development comes when investors in startups have taken their foot off the gas following adverse macroeconomic conditions prevailing globally. This has seen startup funding reduce drastically over the past few months.

Between January and October 2022, Indian startups have raised $22.9 Bn, a fall of 30% from the $32.9 Bn raised during the same time last year.

Speaking along the same lines at Inc42’s The Fintech Summit 2022, Lunia said, “Over the last two years, founders thought short-term and developed bad habits, which have now resulted in them trying to grow and also reduce burn significantly.”

“These bubbles occur every two-three years. People who survive this downturn will again fall into the same rat race when the next bubble comes in. This is the problem,” Lunia added.

India Quotient has launched four funds so far, having invested in more than 80 startups over the last decade. The second fund had a corpus of $20 Mn and invested in 20 startups. Further, the third fund had a corpus of $64 Mn, with investments across 31 startups. India Quotient’s latest fund was worth $115 Mn and has backed 14 startups so far.

Reportedly, the VC firm is looking to launch its fifth fund by late 2023.

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