Prime Venture Partners announces fifth fund of $100 million, to invest in 16-18 startups

Prime Venture partners

Early-stage venture capital firm Prime Venture Partners has announced its fifth fund of $100 million, identical to its fourth fund size.

The Bengaluru-based investment firm has already received commitments of around 80 percent of the fund size. It is expected to close the fund in the next few months and will start deploying the money from the fifth fund in the second half of the year.

The venture capital firm's investors include family offices, university endowments, and fund-of-funds from the USA, Singapore, Europe, and the Middle East.

Apart from fintech, Prime Ventures will also focus on investing in startups that provide artificial intelligence-based services apart from Software as a Service.

“Contrary to the market trend of increasing fund size in subsequent funds, we wanted to stick with the strategy that has worked for us. We continue to work closely with founders, and all our partners have operational experience. Our investors also like our consistent strategy,” said Sanjay Swamy, managing partner and co-founder of Prime Venture Partners.

Over the last few years, Prime Ventures has moved from the seed stage to pre-Series A round as it looks to work with startups with a product-market fit and a few early customers. Its cheque sizes have also grown from $500,000 to a median cheque size of $3.5 million.

Prime is looking to invest in around 16-18 startups over the next four to five years. It also roped Brij Bhushan in as a partner six months ago. Bhushan was a co-founder and COO of Magicpin and also worked as an investor with Nexus Venture Partners.

Swamy said that the company is likely to provide above average return for its limited partners and only a few venture firms in the country have reached the fifth fund in a similar time frame.

“LPs don't like VC funds with one big hit and a lot of misses. What they look for is zero drift,” Swamy said adding that it does not bother the firm that it still does not have a unicorn under its portfolio.

“It is desirable, but not a target. We might be the most successful fund without a unicorn. It makes more sense to have multiple successes with larger stakes than one big success where the fund has a minuscule stake,” he added.

Since 2012, the firm has backed more than 50 startups including WheelsEye, MyGate, Quizizz, PlanetSpark, Dozee, and Zuper. The firm has successfully exited investments in Happay (Cred), Recko (Stripe), Perpule (Amazon), Ezetap (Razorpay), and Tracxn (post its IPO).