IvyCap's 3rd fund reaches final close of Rs 2,100 crore after 2 years

IvyCap’s last few exits were Purplle, Clovia, Pharmarack and Sokratis

IvyCap Ventures, an investor in startups like Purplle, Clovia, BlueStone and Biryani By Kilo, has reached the final close of its third fund at Rs 2,100 crore, more than two years after it announced the first close in February 2022.

At that time, Moneycontrol reported that IvyCap had marked the first close at Rs 1,608 crore and aimed to complete the final close of Rs 2,000-2,500 crore in the next few months.

While limited partners, who put money into venture funds, have become restrained with their investments in VC firms over the past couple of years amid a rising interest rate regime, a top IvyCap executive said that the delay in closing the fund was not because of the ongoing ‘funding winter’.

“We had done the Rs 1,600 crore announcement with letters of intent (LoIs) from investors. We started investing only around November (2022). In that sense, the total time taken to close is around 18 months,” said Vikram Gupta, founder and managing partner of IvyCap Ventures.

“We have 25 Indian institutional investors across the funds. Usually, it takes 2-3 months between an LoI and agreement, and sometimes it might take even longer. It might take six months to start using that capital,” he said.

While IvyCap has already deployed 40 percent of the fund, it expects to use up the rest of the money to back early-stage startups over the next 18-24 months. The firm has earmarked 20 percent of the fund to double down on existing portfolio bets.

“We are looking at disruptive sectors to invest in, such as climate tech, clean tech, and even space tech. Recently, we announced an investment in Dhruva (a spacetech startup). And then there is agritech, logitsiscs and fast fashion,” said Gupta.

IvyCap’s last few exits were Purplle, Clovia, Pharmarack, Sokratis. It considers M&As as the most important route of exits, rather than secondary share sales.

Founded by Gupta, IvyCap raised a first Rs 240-crore fund in 2014, followed by a Rs 535-crore second fund in 2020.

Overall funding to new-age tech companies in March saw a decline to $811 million in 59 deals, down about 29 percent from $1,140 million in 79 deals in March of 2023, data from Venture Intelligence showed.

The total size of investment in the early stage has also declined to $107 million from $138 million in March 2023. Investors like Blume Ventures, Anicut Capital, and Fireside Ventures continue to dominate the most active backer charts, closely followed by Matrix Partners India, Peak XV Partners and Prime Venture Partners.