SUMMARY
The Fund Will Focus On Early Stage Startups, With A Ticket Size Of $250K-$2 Mn
Early stage VC firm 3one4 Capital has announced the launch of its Fund II with an initial corpus of $39 Mn (INR 250 Cr). The fund had an initial target corpus of $23.5 Mn (INR 150 Cr) that was fully subscribed within a quarter of the fundraise, which was initiated in 2017. Now with an oversubscribed interest in the fund, the fund Managers have decided to exercise the green shoe option of an additional $15.69 Mn (INR 100 Cr).
With closed commitments for $39 Mn, the 3one4 Capital team will look to enhance its deep involvement model across its investment domains. The fund will invest early stage startups with ticket sizes of $250K to $2 Mn.
Founded by Pranav Pai and Siddarth Pai, sons of former senior executive at Infosys Ltd and active angel investor TV Mohandas Pai, Bengaluru-based 3one4 Capital Fund I was launched early in 2016 with a corpus of $15.69 Mn (INR 100 Cr). Since then, the fund has built a deep portfolio across its investment focus areas spanning 40+ startups. The firm has built a robust pipeline, developed a proprietary software stack, to manage end-to-end processes from dealflow to portfolio management and exit simulations.
The focus areas include machine-driven actionable intelligence services for the enterprise, enterprise automation, ambient intelligence technologies, edtech, fintech, media and content development and health. The fund also invests a portion of its capital in US-focused companies that have feedforward effects into the themes being pursued in India.
A Quick Look At Fund II Of 3one4 Capital
Fund II is positioned as a natural evolution of the model at scale. For this fund,
3one4 Capital Fund II has harnessed a multitude of Limited Partners (LPs) consisting of institutions and corporations to founders’ family offices and professional fund managers.
Some of these are:
- Kris Gopalakrishnan, Co-Founder, Infosys
- Madhusudan Kela, ex-Reliance Capital
- Nandan Nilekani’s Family Office
- Narayana Murthy (Co-Founder, Infosys) via Catamaran Ventures
- Mohandas Pai’s Family Office, Chairman, Manipal Global Education and ex-CFO, Infosys
- Dr. Ranjan Pai, CEO & Managing Director, Manipal Education and Medical Group
- Reliance Ventures
- S D Shibulal, Co-Founder, Infosys
When it comes to the fund’s investment areas, this is what the Fund II will focus on:
- Enterprise Intelligence and Automation-New frameworks and automated workflows that drive better decision-making and improve productivity across multiple focus areas.
- Media and Content Development-Multi-format and multilingual content that can exploit new distribution strategies to serve rapidly evolving consumption behaviours.
- Financial Technologies-Helping a new generation earn, spend, save, and multiply smarter with highly accessible and multi-modal services.
- Ambient Intelligence-Levelling-up conventional practice in farming, supply chain, construction, and manufacturing through data-driven routines and technology-laced playbooks on the edge.
- Education Technologies-Platforms and technology-enabled services to prepare us all for the jobs of the future by mapping education to outcomes.
- Health-Core innovation to augment research and the development of products and services that can elongate health spans and solve species-level challenges.
Talking about their investment strategy, 3one4 Capital stated, “At 3one4, we believe founders deserve nothing less than transformative. The inflection points at which truly game-changing technologies need capital infusions have moved earlier into the funding spectrum. This paradigm shift has demanded that funds look at early-stage investing with a new lens, and that investors bring more to the table than bulk capital. Through a deep involvement strategy, we are committed to staying biased towards action and pulling the best resources together to help our founders deliver audacious results.”
A Look At Portfolio Investments Of 3one4 Capital
3one4 Capital’s portfolio companies include startups like Licious, P2P lending startup Faircent, HR tech startup Darwinbox, Traxcn, digital entertainment company Pocket Aces, travel startup Tripoto, agritech startup Aibono, and Aarav Unmanned Systems among others.
Here’s a look at some of its investments in 2017:
- In March 2017, Delhi-based machine intelligence-based personalisation platform, Wigzo, secured an undisclosed amount of funding in a round led by existing investor, 3one4Capital.
- In June 2017, HRtech startup, Darwinbox, has secured $4 Mn in Series A funding round led by Lightspeed India Partners along with Endiya Partners, 3one4 Capital and Startupxseed Ventures.
- In March 2017, Bengaluru-based gourmet meat delivery, Licious, has secured $10 Mn in a Series B round led by Mayfield India, 3one4 Capital, Sistema Asia Fund, and Neoplux Technology Fund.
- In November 2017, Bengaluru-based TAO Automation raised an undisclosed amount of seed funding from 3one4 Capital and Arihant Patni.
- In December 2017, Bengaluru-based Graphic India, a digital comic heroes developer raised $5 Mn (INR 32 Cr) in a funding round led by investors at the US-based Liquid Comics along with Start Media LLC; Julian Farrior, co-founder of Backflip Studios; 3One4 Capital; Neeraj Bhargava, founder of Zodius Capital among others.
- In December 2017, Gurugram-based P2P lending startup Faircent has closed $3.9 Mn in a Series B round of funding from Incofin Investment Management and existing investors JM Financial, 3one4 Capital, M&S Partners Pte Ltd and Aarin Capital.
With its Fund II, 3one4 Capital will further focus on companies exploiting technology to create, grow or dominate large markets in India. Given that India has seen a huge influx of foreign capital in the last year, and is still receiving the same attention with global biggies like Sequoia Capital also looking to pour in more money, it will be interesting to watch out what new growth opportunities will the early stage VC firm bet on this year.
