Mumbai: Early-stage venture capital firm Blume Ventures has marked the first close of its third fund at $40 million, a top company executive said.

Blume, which primarily focuses on seed to Series A rounds, is targeting a total corpus of $80 million. It seeks to achieve the final close early next year.

According to Sanjay Nath, co-founder and managing partner, Blume, the capital will be deployed across 30-35 companies, with an average ticket size of about $1 million. “We are looking to go deeper and invest bigger now. Both investors and the start-up ecosystem have matured since we started," Nath said in a phone interview.

While the venture capital (VC) firm invested $100,000 to $150,000 in its first outing in 2011, it had increased its ticket size to $250,000 to about half a million dollars for the second fund.

Blume will now look to pick up 15-25% stakes in its portfolio companies, said Nath, adding that it is vying for larger ownership and longer and deeper commitment to “winners".

The venture capital firm expects to invest 60-65% of its third fund in sectors that rely heavily on domestic consumption, such as healthcare, financial services, travel, commerce and brands, jobs and education, and digital media and entertainment.

The rest will focus on software tech, including cloud, artificial intelligence, analytics, software-as-a-service, blockchain and deep technology.

Security, robotics, and Internet of Things companies, which can innovate and engineer with local talent pools and also have the ability to scale globally, will also be on its radar.

“The larger fund, compared with our humble $20 million beginnings in Fund I, allows us to lead investments more emphatically for higher ownership, commensurate to the value-adding platforms that we have built and in time for fantastic founders that are emerging from the success stories of the first cycle in Indian start-ups," said Karthik Reddy, co-founder and managing partner, Blume Ventures.

Its existing investments are spread across travel, healthcare, cloud, and content, including robotics start-up GreyOrange, which raised $140 million earlier this month, sales management start-up Servify, media start-up Factor Daily and online learning platform Unacademy.

Nath believes that some of the portfolio companies have the ability to scale massively and make users pay for their services, besides the ability to pivot.

“Seeing these common threads has also taught us more about investments and this will affect our future investment decisions as well. We will look more closely at these qualities, and whether founders possess them or not."

Fund III will also fuel Blume’s expansion in the Delhi National Capital Region and Bengaluru.

The company is looking to hire partners as well as analysts.

Blume was founded by Nath and Reddy in 2010. It raised its debut fund of $20 million in 2011, and, subsequently, the $60 million second fund four years later.

Close