Investors Line Up As Xponentia Capital’s Fund II Oversubscribed At INR 1,000 Cr

Private equity firm Xponentia Capital on Tuesday (September 12) announced the final close of its Xponentia Opportunities Fund II after raising INR 1,000 Cr from investors, exceeding the initial target of INR 750 Cr. 

The fund has received commitments from existing Fund I backers as well as new Indian investors. The new commitments largely came from high-net-worth individuals (HNIs), family offices, insurance companies and Small Industries Development Bank of India’s (SIDBI’s) Fund of Funds. 

This is in line with what the partner and cofounder of the fund, Perumal R Srinivasan, told Inc42 on the sidelines of the Inc42’s MoneyX conclave held in July. 

The Mumbai-based PE firm largely invests in high-growth mid-market companies across sectors such as consumer internet, healthcare, financial services, and business services. In a statement, the company said it will continue to invest in startups that have strong growth potential, proven business models, and differentiated value propositions.

“We have raised the Fund almost exclusively from the domestic market… Investor appetite for the asset class has increased faster than I imagined, and we have raised the fund almost exclusively from the domestic market,” said Devinjit Singh, cofounder and managing partner at Xponentia.

Adding further, Srinivasan said, “The success of the fund raise reflects the investors’ belief in the Xponentia Team, i.e. our ability to identify and work with first generation entrepreneurs who want to build sustainable high-quality businesses. Our diverse skillset allows us to be engaged investors in assisting entrepreneurs to manage risk and execute their vision.”

This comes a year after Xponentia announced the second close of its Fund II in July last year after securing INR 365 Cr ($44 Mn) from limited partners. The PE firm claims to have already committed INR 270 Cr from the fund to infuse capital in four startups – EV maker Altigreen, fintech platform Zype, apparel brand The Souled Store and education financing platform Auxilo.

Xponentia’s portfolio also includes other startups such as Easy Home Finance, R for Rabbit, Medsource, Barbeque Nation, among others. While the PE firm exited Spoton Logistics last year after its acquisition by Delhivery, it expects one more exit in late-FY24 from its Fund I portfolio.

The development comes amid a spree of capital raises by Indian VC and PE firms. Earlier today, early stage venture capital firm Vertex Ventures Southeast Asia and India announced that it has secured $541 Mn for its fifth fund.

A week ago, another early stage VC firm Unicorn India Ventures (UIV) announced the first close of its INR 1,000 Cr Fund III at INR 225 Cr. 

Overall, as per Inc42 data, India-focussed VC and PE firms have raised funds to the tune of around $22 Bn since the start of 2022, with $4 Bn trickling in since the start of 2023 itself.