Stage: Series A
Target fund size: $100 million
In February this year, Stellaris Venture Partners, possibly the most keenly watched entrant in India’s venture capital market in recent times, raised commitments worth $50 million for its maiden fund.
Investors, or limited partners in the fund, which has a final target of raising $100 million, include Bengaluru-based software services company Infosys Ltd, several local family offices and as many as 50 HNIs (high networth individuals).
It isn’t unusual these days for venture capital firms in India to tap HNIs for capital. Like Stellaris, almost every other new firm out in the market to raise commitments for a first-time fund is doing the same.
What sets Stellaris apart is the number of HNIs that it counts as limited partners—50 is unusually high by industry standards. It also differentiates these 50 HNI limited partners from others by categorizing them under what it terms its “founder network" with a unique role to play in its investment strategy.
“These are not purely limited partner relationships… rather a more strategic involvement in all stages of the investment life cycle such as sourcing, diligence and portfolio mentorship. Already a very significant part of our deal flow is coming from members of this network," Stellaris co-founder and partner Ritesh Banglani said in an email response.
The “founder network" draws from a diverse group of people including successful entrepreneurs, corporate executives and fund managers. Some of the investors in this group include former Canaan Partners India head and Indifi founder Alok Mittal, Taxiforsure founders Aprameya Radhakrishna and Raghunandan G., Fireside Ventures founder Kanwaljit Singh and Capillary Technologies co-founder Aneesh Reddy.
Banglani and his co-founders, Alok Goyal and Rahul Chowdhri, started Stellaris early last year after breaking away from Helion Venture Partners, one of India’s oldest home-grown venture capital firms. The three constituted the second line of leadership at the Gurgaon- and Bengaluru-based firm and the split was a result of differences of opinion with Helion’s founding partners on investment strategies, profit sharing and succession planning. At Helion, the three Stellaris founders were responsible for key Helion portfolio companies such as cab hailing service Taxiforsure (acquired by Ola), online grocery service Big Basket, cab-hailing service Ola, furniture e-tailer Livspace and online education platform Toppr.
The firm expects to raise the rest of its target corpus within this calendar year and plans to tap limited partners both in India and in markets such as the US, Asia and Europe. It plans to focus on technology start-ups at the Series A stage and has already made two investments, one of them being mobile marketplace Wdyr. Its areas of interest include financial technology, supply chain networks, enterprise software and local language online services. Stellaris co-founder Chowdhri told MintAsia earlier that the firm could invest as much as $3 million in its first cheque to a start-up and invest up to $15 million over the life cycle of the company, based on performance.
The firm sees several opportunities in the ongoing downturn in India’s venture capital market. “It (the slowdown) creates opportunities… particularly for new firms like us which don’t have any portfolio baggage. In the past year, we have seen companies started by more serious entrepreneurs rather than opportunistic attempts to participate in growing valuations," said Banglani.