Early-stage investor 3one4 Capital, which has backed data platform Tracxn, meat delivery firm Licious and fintech startup Tonetag, is raising ₹350 crore ($50 million) for its new fund, Continuum I, a top company executive said.
The firm is managed by Pranav and Siddarth Pai, sons of former senior Infosys executive T.V. Mohandas Pai.
“While the primary purpose of this fund is to invest in our current companies’ growth stages, we do have flexibility from our limited partners (LPs) to invest in new companies if it is a good opportunity," said Pranav Pai, founding partner, 3One4 Capital.
Continuum I, the venture capital (VC) firm’s third fund, will invest selectively in growth stages of 3one4’s portfolio companies. The fund has already hit a first close of ₹150 crore, with backing from a top university endowment in the US and from Sojitz Corp., a Japanese conglomerate, Pai said. The fund is backed largely by new limited partners (investors in VC funds), though some LPs from previous funds will also pool in.
The fund will focus on Series B and subsequent rounds with cheque sizes between $3 million and $5 million, primarily co-investing with other investors, Pai said.
3one4 plans to invest in automation, media and content development, fintech and health. It also plans to invest in consumer data generation technology-enabled services to develop deep consumer behavioural insights, a sector it hasn’t invested in before.
3one4 raised its first fund of ₹100 crore in 2016, and a ₹250-crore second fund in early 2018. The VC firm’s investors include Kris Gopalakrishnan, co-founder, Infosys; N.R. Narayana Murthy, co-founder, Infosys and Catamaran Ventures; Reliance Ventures; Nandan Nilekani’s family office; and Mohandas Pai’s family office.
“As we raise this fund, our biggest takeaway is that we have to help businesses. It’s not just about the money. We provide advice and guidance to our founders," Pai said.
While 3one4’s third fund will focus on follow-on rounds in portfolio companies from its first fund, its second fund continues to invest in new early-stage startups.
Its portfolio includes peer-to-peer lending platform Faircent, media startup YourStory, and data science learning platform Jigsaw Academy.
3one4 is the latest entrant to the club of venture capitalists raising add-on funds to back winners and fast-growing companies in their portfolio. Mint reported on 24 January that a number of early-stage funds, including Kae Capital and Blume Ventures, are raising add-on funds to double down on winners. Kae is raising a ₹100-crore add-on fund, while DSG Consumer Partners raised two add-on funds of $10 million and $20 million in 2014 and 2016, respectively, to back fast-growing companies from its first fund.