Exclusive: Top founders Amrish Rau, Jitendra Gupta to raise fintech VC fund

Pine Labs CEO Amrish Rau and Jupiter neobank founder Jitendra Gupta are in talks to raise a fintech-focused venture capital fund, ingraining two of India’s best-recognized new-age entrepreneurs further in the booming startup ecosystem.

Rau and Gupta will raise a $30 million fund, of which 20 percent will be contributed by the duo personally. The fund, which is in stealth mode and is called White Ventures currently will officially be run and managed by Rau’s wife, Sweta Rau, who has also been an angel investor.

Gupta and Rau have been among India’s most active angel investors, with over 100 companies backed between them. Their portfolio list is enviable- fintech CRED, gaming firm MPL, craft beer maker Bira, Open neobank and digital ledger Khatabook among others. Their fintech portfolio in particular covers nearly every sub-sector- wealth management, neobanks, accounting and payments.

The fund will be finalised in the next two months or so, with commitments from high net-worth individuals and a few institutions from India, Japan and other countries. Gupta and Rau declined to comment.

Founders, who often have more credibility than career investors- having built companies themselves and are in touch with operational realities- are now leveraging their vast networks and fundraising ability to become fund managers- a significant step up from occasional angel investments from their own wealth.

“Investing as a fund gives them more control. They can double down on promising companies. They can invest with a strategy, as opposed to the network-driven hustle culture that angel investing has,” said a person aware of the matter, requesting anonymity.

The new fund could invest as much as $2-3 million per company

“Every fintech founder will want them on their cap table (a list of a company’s investors). They bring experience, networks and now as a proper investor, they have even more skin in the game. They have to manage other people’s money, and that comes with responsibility. If you make poor angel investments, it is finally just your loss. This fund will make them more calibrated,” the person added.

Rau and Gupta have been partners-in-crime for years, having co-founded and led payment gateway startup Citrus Pay. When Naspers-owned PayU acquired Sequoia-backed Citrus for $130 million, one of the larger startup exits at the time. They went their own ways in the fintech world- Gupta was the managing director of PayU India while Rau headed mergers and acquisitions for PayU.

The duo kept making angel investments, often together, and often more than others expected them to, as they wanted to deepen their exposure to the startup ecosystem. Gupta started neo-banking app Jupiter in late 2019, while Rau in 2020 became CEO of Pine Labs- which is valued at over $3 billion and expected to list in the stock markets next year.

The new fund also underscores the fintech boom in India, where growing digital payments, led by the Unified Payments Interface (UPI) has led to strides in banking, wealth management, credit cards, lending to small businesses and more. Three Indian fintechs- Groww, BharatPe and CRED became unicorns in 2021- valued at a billion dollars or more.

Amid a record funding boom, White Ventures will be this year’s second founder-run venture firm in India, after Freshworks’ Girish Mathrubootham and Eka Software’s Manav Garg set up ‘Together’, an $80 million investment firm to back enterprise software startups.

This also mirrors Silicon Valley, where more founders are taking on the additional role of a fund manager because they have as much or more access to new entrepreneurs, fresh talent and new ideas as even the best venture capital firms do.

This brings a possible conflict that founders will become distracted from running their companies, The Information reported on the trend. In this case, sources insisted that both Rau and Gupta will see their companies as their primary objective, which is why Rau’s wife Sweta will play a key role in managing the fund.

Entrepreneurs, however, will raise money because of the fintech duo’s credibility and the financial services experience they bring, founders said.