piVentures, which invests in Artificial Intelligence (AI) and deep tech startups, is looking to raise a second venture capital fund three times the size of its first- signalling high interest in technology startups and their investors.
The firm on April 26 said that it plans to raise Rs 565 crore with an option to raise Rs 185 crore more (known as greenshoe), compared to its first fund of Rs 225 crore which it raised in 2018.
piVentures has invested in healthcare firm SigTuple, logistics firm Locus and space technology firm Agnikul Cosmos among others.
“We are clear that we want to invest in AI and technology that really moves the needle, and is really transformational. We don't want to invest in incremental technology or whatever the market finds hot at that point,” Manish Singhal, co-founder and managing partner at piVentures told Moneycontrol.
Singhal aims to raise the entire fund in the next one year, and for a first close of about Rs 200-250 crore in the next quarter or so. A first close marks a significant portion of the fund being raised and allows the firm to continue raising while investing in companies as well.
While it invested in 15 startups from its debut fund, it will invest in 25 companies from this fund, with the first cheque of $0.5 million to $1.5 million (Rs 3.5 to Rs 10 crore) in seed and pre Series A rounds of startups.
“In the next decade or two, India will be the deep tech nation of the world. All our companies are solving inherently global issues. And that is part of the reason why this second fund is larger. We want to enable that opportunity,” Singhal said.
piVentures’ second fund also comes at a time when internet startups have been raising money faster than ever at high valuations, and 2021 so far has seen 11 unicorns- startups valued at over a billion dollars- the same as all of 2020.
“There is a lot more domestic liquidity and keenness to invest in funds like ours. It is a good environment for investors as well as startups,” Singhal said.
Investors from its first fund include UK’s development finance arm CDC, IFC, Accel and Hero Enterprise’s Sunil Kant Munjal, among others.
While it has fast-growing companies in its portfolio, piVentures doesn’t have a unicorn yet- generally a marker of success for early-stage VC firms, although by no means the only one.
“Unicorns are bells and whistles from a business-to-business (B2B) startup point of view. It doesn't mean much. Unicorns are often a function of how much money you raise, and B2B firms simply don't need to raise that much. For B2B firms, the metrics have to be looked at differently. And I think we can do very well as a fund without unicorns being the key metric,” Singhal said.
