Next Bharat Ventures has set out on its first fund-raising drive with a total corpus of $40-45 million (around Rs 330-370 crore) anchored by Japan’s Suzuki group, people aware of the developments told Moneycontrol. The fund is setting up its base in Gujarat’s GIFT City and will make investments in startups from there.
Apart from direct investments in companies, Next Bharat Ventures will also be a fund sponsor (limited partners) and invest in other smaller VC firms, the sources said. The process has not been completed yet, so the contours of the fund may change slightly.
The Next Bharat Venture Fund - 1 is registered as a Category II fund with the International Financial Services Centres Authority (IFSCA).
Similar to other Alternative Investment Funds (AIFs), even Next Bharat Ventures will be governed by the Securities and Exchange Board of India (Sebi), but the fund will be granted special dispensations that all AIFs based in GIFT City get.
In Gujarat International Finance Tec-City, or GIFT City, the dispensations equip AIFs with higher operational flexibility as they get special tax incentives and are exempt from other regulatory requirements which lower the overall cost of operations, among other benefits.
Next Bharat Ventures will be run by Vipul Nath Jindal, head of Suzuki Innovation Centre at Suzuki Motor Corporation, Moneycontrol has learnt. The fund is an impact fund and will focus on companies solving for the non-metro cities, or for Bharat 2.0.
“At Next Bharat, a proud subsidiary of Suzuki Motor Corporation, Japan, we are dedicated to advancing the next billion in India by supporting impact entrepreneurs who are committed to making a substantial difference,” says the company’s website.
“Our mission is to address the significant income disparities in India by elevating the informal and rural sectors as pivotal elements of Bharat's growth narrative.”
An increasing number of companies are now tapping into the customer base in non-metro cities as internet penetration increases and people show willingness to try new brands.
Next Bharat Ventures did not reply to Moneycontrol’s queries.
Also read: Budget may launch ghar wapsi scheme for Indian startups to flip to GIFT City
More dry powder
A new VC fund coming into the scene means more capital will be added to the existing dry powder available for the Indian startup ecosystem. Venture funds are cumulatively sitting on at least $12 billion in capital waiting to be deployed in India, the world’s third-largest startup ecosystem, as per several industry estimates.
That total is only increasing with the launch of newer funds.
Over the past months, Oister Global launched a Rs 440 crore fund, Sauce.vc launched its third fund with a corpus of Rs 250 crore, even Titan Capital is readying a new Rs 300 crore fund.
Former BharatPe CEO Suhail Sameer also started OTP Ventures and is set to raise Rs 400 crore.
There are other larger funds, too. Cornerstone Ventures launched its second fund with a total capital pool of $200 million (around Rs 1,600 crore). Similarly, Synapses launched a $125 million (around Rs 1,000 crore) fund, which will add to the total capital available for startup founders.
Along with new fund launches, existing funds becoming more selective with their approach and backing only the best startups has also resulted in accumulation of dry powder, industry executives said.
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