The 5 Most Active Venture Capital Firms From Bengaluru

Bengaluru touted as the Silicon Valley of India has played a pivotal role in shaping India’s startup ecosystem. The city’s Koramangala area has been a lucky charm for startups, having birthed unicorns of the likes of Flipkart.

Home to over 11,000 startups, the city that has nurtured thousands of startup dreams has marked many achievements as well — from being ranked second on the list of best locations for launching global tech startups to bagging the maximum number of funding deals in 2017. According to Inc42 DataLabs, Bengaluru garnered $5 Bn funding across 241 deals in 2018.

Being the mecca for startups in India, it is but natural that Bengaluru attracts the biggest and the best venture capital firms in India, scouting for the next big, innovative idea.

As we’re still early into the new year, we thought it may be a good idea to give Inc42 readers a lowdown of the top five venture capital firms from Bengaluru, which executed the highest number of deals in the country last year, thereby attracting 40% of the total deals in the city. With 38 deals, Sequoia Capital notched the top position, followed by Kalaari Capital, Chiratae Ventures, Axilor Ventures and Stellaris Venture Partners.

Meet The Top 5 VC Firms From Bengaluru

Chiratae Ventures

Chiratae Ventures, formerly known as IDG Ventures India, is a leading India-focused technology venture capital fund specialising in startups, early-stage, growth-stage, and expansion-stage companies.

The venture capital firm invests in India-based companies and also in companies outside India with an investment range of $1 Mn and $10 Mn.

It advises three domestic funds — Pandara Trust, Chiratae Trust, and Technology Venture Fund — that have a combined total of approximately $470 Mn under management and more than 70 investee companies.

Kalaari Capital

Kalaari, formerly known as Indo-US Venture Partners, is a $650 Mn venture capital fund investing in early-stage, technology-oriented companies in India. The venture capital firm seeks companies that are capable of capturing new markets, providing innovative solutions and creating new wealth for India and beyond.

It usually invests $2 Mn-$5 Mn in technology-savvy companies and technology-enabled services for India and the global markets. So far, it has floated three venture capital funds and is reportedly in the process of launching the fourth fund, which is expected to be worth $200 Mn.

Sequoia Capital India

One of the most active venture capital firms from Bengaluru, Sequoia Capital India specialises in investments in seed, early, mid, late, expansion, public, and growth-stage companies. It invests between $100K and $1 Mn in the seed stage, $1 Mn-$10 Mn in the early stage, and $10 Mn-$100 Mn in growth-stage companies. As of January 2018, the venture capital fund was managing about $3.2 Bn of investments.

In August 2018, Sequoia Capital India announced the close of its sixth fund at a corpus of $695 Mn, which was quite short of the planned $1 Bn. Sequoia India then slashed the size of this India-focused fund by 25% because of the volatile status of the country’s early-stage tech ecosystem.

Stellaris Venture Partners

Stellaris Venture Partners is an early-stage, technology-focused venture capital firm with offices in Bengaluru and Delhi-NCR. Its investment areas of interest include global software companies with an India advantage as well as tech businesses solving India-specific problems. It invests in seed and Series A rounds of Indian technology companies.

The venture capital fund also counts software company Infosys as one of its limited partners. Stellaris had formed a “founder network” in 2017, which plays a key role in the fund’s investment strategy. The network comprises its 50 limited partners, successful Indian entrepreneurs, corporate executives, and fund managers.

The venture capital firm raised its last funding in January 2018 from Cisco Investments with an aim to invest in 18-20 startups as part of its maiden fund worth $100 Mn. Also, it made the first close of $50 Mn for its maiden venture capital fund in February 2017.

Axilor Ventures

Axilor aims to support early-stage entrepreneurs and improve their odds of success through its programmes, which include an accelerator and seed fund.

The venture capital firm has made over 40 investments in the past three years. Besides having collaborated with IIT Madras, Axilor has also set up an Axilor Market Network, Axent, to help provide startups with go-to-market assistance as well as access to funding through its network of over 40 VCs and to its community of more than 225 founders.

The Other Active VC Firms In Bengaluru

1. 3one4 Capital
2. Saama Capital
3. pi Ventures
4. Accel Partners

According to a recently released Bain & Co report supported by the Indian Private Equity & Venture Capital Association (IVCA) entitled ‘Perspectives on Indian VC Ecosystem, 2018’, the VC landscape in India is in a maturing phase with a shift in focus from the number of deals to the quality of deals. There has also been a secular increase in round sizes across investment stages over the past three to four years.

Along with this, investors are also cautiously planning their future and are looking for better exits with each investment. Bengaluru offers them a big pool of new-age entrepreneurs with a blend of innovation, technology, and scalability to choose from, which is why the city has so far been the No. 1 startup hub in the country so far. However, the startup wave has now started touching shores of cities like Mumbai, and Delhi, as well and Bengaluru will have to work hard to keep its position.

Stay tuned to gain more insights into the startup ecosystem of these cities in upcoming articles by Inc42.