Chiratae Ventures, a homegrown VC (venture capital) firm that has backed unicorns like Lenskart, Cure.fit and Flipkart among others, has marked the first close of its maiden growth fund at $100 million (Rs 759 crore), joining a growing list of private market investors to raise large India-dedicated funds.
Chiratae Growth Fund I, which was initially launched with a corpus of Rs 750 crore with a greenshoe of Rs 300 crore, was oversubscribed and thus, the fund raised Rs 759 crore in its first close, TC Meenakshi Sundaram, founder and vice-chairman of Chiratae Ventures, told Moneycontrol in an interaction. Sundaram also said that the VC would be able to close the fund by end of the year “with substantial oversubscription.”
This is the first growth fund raised by Chiratae Ventures. The fund counts domestic institutional investors such as Kris Gopalakrishnan Family Office, Choksi Family Office (promoters of Asian Paints), SBI and IIFL Wealth and Asset Management and other Family Offices, as well as existing global investors and key LPs (limited partners), the company said.
Sundaram also said that the company would be investing at Series C stages and beyond with the fund. With the growth fund, Chiratae Ventures has now added a new vertical to its investment strategy, as the VC typically invests at Seed to Series A rounds. Sundaram said that Chiratae Ventures would look to invest in about 15-20 companies with the fund. Sundaram said that the company would participate in $15-20 million rounds with the fund and Chiratae Ventures’ cheque sizes could be around $500,000.
Chiratae Ventures would also do follow on investments in its portfolio companies with the fund and would back “industry leaders” in the “disruptive technology” space with the fund, Sundaram added. According to Sundaram, in India, there are fewer VC companies coming in at Series C and beyond rounds, which gives Chiratae Ventures an opportunity to back “good companies” at these stages.
“Good companies are still getting money. Our portfolio companies that are market leaders have been able to raise funds so good companies are getting money. Valuations have taken a hit, which means for capital, you are diluting more, but good companies are getting more than what they want, they are still getting multiple term sheets,” said Sundaram.
Chiratae Ventures, founded in 2006 by Sudhir Sethi and Sundaram has backed more than 120 companies and claims to have assets under management (AUM) of more than a billion dollars. The company has had three of its portfolio companies including fintech unicorn PolicyBazaar going public. Sundaram claimed that it has returned capital to its LPs every year for a decade.
Chiratae Ventures has become the latest VC firm to raise a large India-dedicated fund, joining the likes of some of the world’s biggest players, including Sequoia Capital, Accel, Elevation Capital and Matrix Partners.
Data compiled by Moneycontrol shows that 13 India-dedicated PE/VC firms have raised over $6.5 billion from limited partners in 2022. However, investors still expect the much-talked-about funding winter to last for another 12-18 months.
“It is a good time to be on the buy side. Term sheets aren’t getting closed in a week’s time or a couple of days time. So there’s time for proper evaluation. The valuations have corrected. But you can never time the market. I think a revival would happen only by the second quarter of 2023 or it could might as well get delayed till 2024,” Sundaram said.
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