1 min read.Updated: 19 Feb 2020, 12:15 AM ISTM. Sriram
VC company will invest in existing portfolio firms from $30 million fund
Iron Pillar’s portfolio is more concentrated towards business-to-business firms than traditional consumer internet so far
Venture capital fund Iron Pillar is in talks to raise a $30 million add-on fund to invest in existing portfolio companies such as online meat grocer FreshToHome and phone service management firm Servify, said two people directly aware of the matter, requesting anonymity.
Iron Pillar is a growth-stage investor which invests between $7-15 million as the first cheque in Series B and C rounds of companies.
Founded in 2017 by former Morgan Creek director Anand Prasanna, former Citigroup India investment banking head Sameer Nath and former DFJ India head Mohanjit Jolly, it had raised its debut fund of $90 million in 2018 to invest in technology-led startups.
“They have almost run out of the first fund, and want to invest more in existing portfolio firms, hence the add-on," said the first person cited above.
Prasanna declined to comment to emailed queries.
Increasingly, investors want to take part in the later stage rounds of their portfolio companies so that their stake does not get diluted when the company is being highly valued, and the early backer still gets enough upside.
A number of early-stage venture capital (VC) firms such as Blume Ventures, India Quotient, Kae Capital and 3one4 Capital have raised add on funds to back winners from their portfolio. VC firms also seek an extension on their existing funds when raising a new one is still some time away, or when their portfolio companies are raising capital at a faster-than-expected rate. Sequoia Capital India too extended its sixth domestic fund by $200 million, Mint reported on 31 July 2019.
Iron Pillar’s portfolio is more concentrated towards business-to-business firms than traditional consumer internet so far. Its portfolio includes speech recognition tech firm Uniphore, test-preparation startup Testbook, Vyome Therapeutics, which focuses on drug-resistant skin pathogens, jewellery-maker Bluestone, and NowFloats—which helps businesses with their online presence.