Venture capital fund Chiratae Ventures is set to hit the first close of its fourth India-focused fund at $150 million, two people aware of the development said, on condition of anonymity.
Chiratae, formerly IDG Ventures India, was founded in 2006 by Sudhir Sethi and T.C.M. Sundaram. It has backed startups such as Myntra, Lenskart, CureFit, and Policybazaar.
“So far, the fund has raised about 60% of its capital from Indian investors. While its existing limited partner (LP), the Small Industries Development Bank of India (Sidbi), has committed ₹150 crore, there has also been strong interest from industrial houses and local family offices," said one of the persons mentioned above. A leading fast-moving consumer goods company is also in talks to invest in the fund. Chiratae aims to raise $275 million for its fourth fund, the person said. “While the share of domestic investments was close to 40% for its second and third fund, the fourth fund has seen much higher interest from Indian investors," he said.
Sethi, however, declined to comment on the firm’s fundraising plans.
Chiratae had launched its first fund of $150 million in 2007 with investment from US-based media, data and marketing firm IDG Inc. It floated its $95 million second fund, IDG Ventures Fund II, in 2013. Its third fund closed in 2017 at $208 million with an investment of $20 million from International Finance Corp. (IFC), the World Bank’s private investment arm, as well as commitments from Cisco Investments, the corporate venture arm of American networking firm Cisco Inc., exceeding its initial target corpus of $200 million. Sidbi, too, had invested about ₹90 crore in the third fund.
Another investor participating in Chiratae’s latest fundraise is IFC. On 30 August, IFC said it would commit $20 million to the fourth fund.
Chiratae has been a significant early-stage investor in the Indian startup ecosystem, with investments in fashion retailer Myntra, eyewear firm Lenskart, online insurer Policybazaar, and home rental firm Nestaway, among others. It had also acquired an indirect stake in Flipkart in 2014. So far, Chiratae has 14 exits from its portfolio.
For Indian venture capital funds, 2019 has been a busy year, with several fund managers out on the road to raise capital for their latest funds.
Early-stage investors Blume Ventures and India Quotient are expected to close their third funds at $80 million and $60 million, respectively, while consumer-focused fund A91 Partners closed a $350-million fund in July. Fireside Ventures is in the midst of raising its second $100-million fund.
Sequoia Capital India, the local arm of the storied Silicon Valley investor, has asked for a $200 million extension of its sixth fund, which closed at $695 million last year, driven by a fast-growing market and interest from limited partners (LPs, or investors in the fund), Mint had reported in July.
Chiratae’s fundraise comes at a time when VC funding remains strong despite the overall slowdown in the Indian economy. In the first six months of 2019, VC investors deployed $4.7 billion across 346 deals, compared to $4.3 billion across 338 deals in the corresponding period of last year.