Mumbai: Investment Trust of India (ITI) group has launched an early stage venture capital fund—ITI Growth Opportunities Venture Fund—targeting a corpus of up to ₹ 150 crore for the fund, said a senior executive of the firm.
Sudhir Valia-backed ITI is a financial services conglomerate, offering equity and derivatives trading, equity and commodity market research, portfolio management services, mutual fund and insurance product distribution, and investment banking. It is also in the business of vehicle finance, SME finance, education institution finance, small loans and gold loan.
Valia has been a director on the board of Sun Pharmaceutical Industries Ltd since 1993 and is also the brother-in-law of Dilip Shanghvi, managing director of Sun Pharma. Valia is the largest shareholder in ITI group.
“We are looking to raise ₹ 100 crore for the fund with a green shoe option to raise a further ₹ 50 crore," said Mohit Gulati, managing general partner at ITI Growth Opportunities Venture Fund. The fund has already hit a first close with a sponsor commitment of ₹ 30 crore from the ITI group.
The firm will target a mix of high net-worth individuals (HNIs), select corporates and marque Indian professionals working overseas for the fundraise. It will also raise funds from investors who have previously worked with the fund manager. Gulati has previously invested in companies such as logistics startup Ecom Express and hyperlocal delivery startup Grab.
“We expect to hit the final close of the fund in the next 12 months," said Gulati. Apart from the Growth Opportunities Fund, ITI group is also running another alternative investment fund—a long-short equity fund. According to Gulati, the fund will invest in early stage startups across seed and pre-Series A stages, while also selectively co-investing in Series A transactions.
“We will invest in around 20-24 startups with a with a median ticket size of $0.5 million," he said. The fund has also set up a advisory team of industry professionals with tremendous domain expertise in fields such as healthtech, fintech, retail, artificial intelligence and machine learning, he said. “The fund is also structured such that we won’t be charging any upfront management fee from investors. The fee will be realized by the firm out of the carry generated from successful exits that we deliver."
The start-up boom in India over the last three to four years has seen several business families and corporates sponsor venture funds.
Last week, former Tata Sons chairman Cyrus Mistry said that he is setting up a new venture—Mistry Ventures LLP— that will provide strategic insights and advice to businesses, incubate new ventures and provide seed, early stage and growth capital to startups in India and globally.
Other high net worth individuals who have set up investment firms include Infosys co-founders N.R. Narayana Murthy and S. Gopalakrishnan, Piramal Group’s Ajay Piramal and Mistry’s predecessor Ratan Tata.
Murthy’s Catamaran Ventures, Gopalakrishnan’s Axilor Ventures and Tata’s RNT Associates have all earlier invested in startups. Piramal is the lead investor in Montane Ventures, an early stage investor.
One of the earliest HNI-backed family offices, Azim Premji’s PremjiInvest has invested in startups as well as mature firms, with over $2 billion of assets under management.