Early-stage venture capital fund Prime Venture Partners said on August 25 that it has closed $75 million of its fourth fund of $100 million, its largest so far, underlining investor appetite for Indian startups.
It will look to make 15-20 investments in new areas such as Decentralised Finance (DeFi)/Crypto, Electric Vehicle, and Gaming infrastructure platforms., in addition to its existing focus areas of Fintech, EdTech, HealthTech, Consumer Internet, and Global SaaS.
Some of its investments include interactive learning startup Quizziz, software solutions provider MyGate, neo bank NiYO, digital health player MFine, Dozee among others.
Speaking to Moneycontrol, one of the fund’s three Managing Partners Sanjay Swamy said, “For the newly planned verticals our strategy will be to invest in anything which is a software infrastructure play. Even for crypto, there will be infrastructure building opportunities in any scenario.”
The newly announced fourth fund has seen the first close of $75 million and the balance of $25 million is likely to be closed by the end of this year. Prime Venture Partners’ last three fundraises were for $8 million in 2012, $46 million in 2015, and $72 million in 2018.
The firm will also continue to invest in the four core focus areas of fintech, ed-tech, health tech, and SaaS, Swamy added.
“We plan to make 15 to 20 investments through this fund. Our model is that we keep meaningful capital for both the first funding and at least one follow-on round,” he explained.
Investors in this fund include the International Finance Corporation (IFC), part of the World Bank Group, a top-tier university endowment, several returning family offices and institutions, and numerous global technology entrepreneurs. The fundraise was executed virtually with investors across the US and South-East Asia.
Swamy added that the firm’s first two funds have been fully deployed and 60 percent of the third fund has been deployed, the rest has been committed and will be deployed in the next 18 months.
The fund was started in 2012 by Shripati Acharya and Sanjay Swamy. Amit Somani was added as a partner in 2015, and now the firm is looking to expand its leadership team by adding a fourth partner.
Amidst the funding frenzy and a well-capitalized market, Swamy said the definition of seed funding is evolving, and finding the right amount of capital requirement is key.
“The good companies will receive anywhere between $1-2 million as seed capital. It is important to not under-capitalized companies, but we have seen a lot of companies that got overcapitalized. This is a negative because you want to actually show the progression as you are building companies in phases. There is no shortcut,” he said.
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