Z3Partners hits first close of maiden fund

Z3 raised capital from family offices and HNIs for first close. For final close, it will tap institutional investors, too

Swaraj Singh Dhanjal
Published6 Jan 2021, 11:41 PM IST
Z3Partners was founded by Gautam Patel, a co-founder of Zodius Technology Fund and Zodius Technology Opportunities Fund, which has invested in startups such as BigBasket, Pepperfry, OfBusiness and MedGenome
Z3Partners was founded by Gautam Patel, a co-founder of Zodius Technology Fund and Zodius Technology Opportunities Fund, which has invested in startups such as BigBasket, Pepperfry, OfBusiness and MedGenome

Z3Partners, a venture capital fund focused on India’s digital and technology companies, has raised 100 crore, marking the first close of its maiden fund which aims to raise a total of $100 million (around 730 crore).

Z3Partners was founded by Gautam Patel, a co-founder of Zodius Technology Fund and Zodius Technology Opportunities Fund, which has invested in startups such as BigBasket, Pepperfry, OfBusiness and MedGenome. Its co-founders include Anand Batra, a former senior executive at Pepperfry, Yusuf Allana, former finance director at Colgate Palmolive and Avinash Kapur, who was previously with Deloitte.

“The final close target is $100 million and we are in a good position to get there latest by the third quarter of this calendar year,” Patel said in an interview.

For the first close, Z3 has raised capital from family offices and high net worth investors. For the final close, it will also tap a few institutional investors as well as more family offices.

“We have a strong digital and tech portfolio that is performing well at Zodius Technology Opportunities Fund. As a result, our long-standing investors have been hugely supportive; in spite of covid-19, we’re doing our first close at Z3Partners with mainly HNIs and Ultra HNIs in India as well as Europe and the US,” said Patel.

Z3Partners will invest in early growth companies, with initial cheque sizes ranging from $3-5 million.

“In Zodius Technology Opportunities Fund, we wrote $3 to $7 million checks where we invested in early growth companies, that's the investment thesis that I'm extending at Z3Partners. So we will look at companies that have been around for three to five years, which are market leaders in their area and which do three to five crores of revenue per month, companies that will get to EBITDA positive within two years of us investing in them,” said Patel.

The firm has already made two investments so far - Cyfirma, a cyber threat intelligence software start-up and DealShare, a social commerce-led online grocery start-up.

“From a sector perspective in Z3Partners we will be looking at eCommerce, B2B Commerce, Fintech, Data Analytics, SaaS, and as well as a lot more than we looked at Zodius as now we are also starting to look at Agritech as well as Cybersecurity,” said Patel.

Z3Partners plans to make only eight to 10 investments per fund, unlike the traditional venture capital model of building a huge portfolio of companies.

“We like to spend over 50% of our time with our portfolio companies. Venture and Private Equity Funds would like to spend time with their companies. However, the question is - how many of the entrepreneurs want to spend time with Funds? When you have operating experience and intricate understanding of their businesses, and you have a reputation of trust, only then entrepreneurs really want to spend time with you. And that's what our team brings to the table,” said Patel.

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First Published:6 Jan 2021, 11:41 PM IST
HomeCompaniesStart-upsZ3Partners hits first close of maiden fund

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