PeerCapital targets ₹900 cr for debut fund

The firm has already raised ₹300 crore towards the first close of the fund which was started in March last year. It is targeting a final close by this September.

“We have so far raised capital from family offices, HNI’s and startup founders. We are now in talks with institutional investors," said Ankur Pahwa, co-founder and managing partner at PeerCapital. He said the total corpus includes a green shoe option of ₹300 crore.

The firm was founded by Pahwa, former partner and national leader, e-commerce, consumer internet and startups at EY; Rohit MA, former managing director and co-founder, Cloudnine Group of Hospitals; and Karthik Prabhakar, former managing director, Chiratae Ventures.

PeerCapital is a category II alternative investment fund or AIF which also has a Delaware, US-based feeder vehicle to tap into global pools of capital. The firm has started deploying funds from the capital raised so far. Some of its portfolio firms include Saveo, Furrl, Vaaree, OneImpression, Jar and Koo, Pahwa said.

“Our core strategy is to deploy in companies looking to raise Seed to Series A funding rounds. Our initial cheque sizes will range anywhere between $0.5-2 million," Pahwa said, adding the fund will double down on its investments in companies for follow-on rounds. “We are looking to build a portfolio of around 30+ companies through this first fund," he added.

Early-stage investing continues to be buoyant even amid the fear of a larger funding winter setting in.

Early-stage deals comprised 60-62% of the total funding in volume terms in 2021 and 2022, global consulting firm PwC said in a report in January. “Average ticket size per deal was $4 million per deal. In value terms, early-stage deals contributed to approximately 12% of the total funding in CY22 compared to nearly 7% in CY21," PwC said.

“We remain extremely excited about the timing of our fund as winter doesn’t last forever and history has shown the quality of companies built in similar economic cycles generate exceptional outcomes," Pahwa said. “This vintage has the potential to create legendary companies as the ingredients of reasonable valuations, resilient and grounded entrepreneurs, a capital efficient eco system and an eye on building sustainable businesses make for a perfect recipe for success," he added.

As domestic institutional investors mature, an increasing number of funds are now able to tap into the growing pools of capital and raise larger funds to invest in the startup ecosystem. From family offices to ultra high net worth individuals to insurance firms, more institutions are now backing local funds. The domestic pool is competing with global investors to invest in new-age startups. According to data compiled by Refinitiv, India-focused funds raised about $11.2 billion from investors in the last calendar year.