SUMMARY
The new fund is larger than its previous three funds, which have consistently been $350 Mn
SAIF has closed about six investments this year across sectors like consumer brands, software, education technology and financial technology
SAIF Partners was also an early backer of unicorns like Paytm and Swiggy
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SAIF Partners has raised $400 Mn for a new fund and rebranded the 18-year-old influential venture capital firm Elevation Capital as it looks to back more early-stage startups.
The new fund’s closing comes a little over two years after it closed a previous fund. This will take its assets under management to over $1 Bn. The new fund will be larger than its previous three funds, which have consistently been $350 Mn.
SAIF has closed about six investments this year across sectors like consumer brands, software, education technology and financial technology. These companies include energy bar maker Yoga Bar, SaaS-based startup Zomentum, Gurugram-based edtech startup Camp K12 and Jodo, which allows users to pay school fees in instalments.
While early-stage venture bets are its main focus, SAIF also invests about 20% of the corpus in public market transactions, where it holds a stake in companies for a long period. The firm has a portfolio of over 60 companies, with offices in Gurgaon and Bengaluru.
SAIF Partners has been investing in India since 2001. It specialises in private equity and venture capital across Asia. Its focus area includes IT, ITes, industrials, financial services, Internet, consumer product, and mobile.
“While SAIF enjoyed a great amount of equity in the ecosystem, the name itself didn’t communicate what we stand for. It was, at best, an acronym. So, as we looked to raise a new fund, we thought that it’s a good time where we should think about a new name and communicate what we stand for, and our investment ethos a lot better,” said Ravi Adusumalli, managing partner.
Elevation’s new fund comes at a time when several large funds have been laser-focussed on writing first cheques for startups, making the market for high-quality deals competitive.
In the last 12 months, Sequoia has raised $1.35 Bn, Accel $550 Mn and Lightspeed $275 Mn to deploy in India and Southeast Asia.
SAIF was founded in 2001 as a joint India-China fund with Adusumalli leading the first investment in IT services company Sify.
However, it was in 2010 that it raised its first India-dedicated fund of $350 million, followed by two more funds of the same corpus. SAIF’s last fund, or fund six, closed in 2017 with an increased focus on seed stage deals.
Indian Startup Funding Recovers In Q3 2020
Compared to Q2 2020, both the funding amount and deal count recovered by 167% and 46% respectively. However, the funding amount still remains 32% lower compared to Q1 2020, whereas the deal count was 25% higher in Q1. When compared to Q3 2019, both the funding amount and deals in Q3 2020 remained relatively low, indicating the adverse impact of the pandemic on startup investments in 2020.
A study by Inc42Plus has revealed that between January to September 2020, so far $8.1 Bn has been invested into Indian startups across 652 funding deals. Out of which 51% or $4.1 Bn was in Q1 2020. Whereas in terms of deal count Q3 2020 had the highest contribution, accounting for 40% or 261 out of the 652 deals recorded this year (as of 25th Sept).
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