Rocketship.vc Raises $125 Mn In First Close Of Third Fund

The Silicon Valley-based venture capital firm Rocketship.vc has raised $125 Mn in the first close of its third fund. The firm is now moving towards investing the raised funds across startups.

According to a Mint report, Rocketship.vc will continue to invest in Indian startups. The vc firm did not divulge the average ticket size of investments it plans to make, or any target sectors and the number of startups it will invest in.

In the past, the firm has invested about one-third of its total allocation in Indian startups. It started out by investing in seed and early-stage startups, before moving on to later stages by investing in Series A and B funding rounds.

Rocketship.vc’s last fund came in 2019-20, when it raised $100 Mn for its second fund, while its first fund came in 2015 and was capped at $40 Mn. It has around 20 Indian startups in its portfolio, including the likes of Khatabook, Moglix, NoBroker and Jar, among others. 

The vc firm also plans to use the remaining capital from the second fund to deploy the same for follow-on investments in its existing companies. It invested in around 20 startups from the second fund.

“One-third of our investments have been in India, one-third in the US, and the remaining in other countries. Fund II is almost fully deployed and we are currently investing out of Fund III,” Venky Harinarayan, partner at Rocketship said in an interview. 

“We are excited about India and want to invest in companies which we call ‘growth outliers’ where the flywheel is spinning, and they are growing quickly,” he added.

While Harinarayan said that the third fund is likely to have a bigger corpus than the first close, he did not disclose the exact amount.

Just yesterday, Lightspeed, another US-based venture capital firm, closed a dedicated fund for India and SEA worth $500 Mn. The Lightspeed India IV adds to the almost $1.5 Bn investment made by the VC firm in India so far.

Over the first half of 2022, India saw 78 funds launched or announced, worth a collective $12.3 Bn, according to an Inc42 report.

Some of the largest funds that have been launched in 2022 so far include Sequoia’s India & SEA fund worth $2.85 Bn, General Atlantic’s $2 Bn commitment to Indian startups, Elevation Capital’s $670 Mn fund and Accel’s $670 Mn Accel India VII, among others.

Even as commitments from investment firms are significant, India’s startup ecosystem recorded $6.8 Bn in funding raised in Q2 2022, down 42% from the $11.8 Bn raised in Q1 2022.