IDG Ventures India closes Rs 1,360-cr fund

BENGALURU: IDG Ventures India, which counts Ratan Tata and Infosys cofounder Kris Gopalakrishnan as its advisors, is about to close its third country-focused fund of $200 million (Rs 1,360 crore) in a fund-raising that may attract World Bank arm International Finance Corp (IFC), according to two people familiar with the development.

IFC is looking to invest about $20 million in IDG Ventures India III, which reached a first close of $120 million in February 2016. ET reported in May 2016 that the firm has managed to garner commitments of $150 million. When subscriptions close for the third fund, total assets under management will reach $400 million at IDG Ventures India that counts eyewear brand Lenskart and home rental startup NestAway in its portfolio. IDG declined to comment when contacted by ET.

IDG Ventures is one of the few large venture capital firms that actively tap domestic capital, unlike peers that have hitherto largely relied on overseas investors. In the current round of cash raising, the VC firm has reached out to several family offices, while working with firms such as Edelweiss Wealth Management, which is expected to mobilise around Rs 100 crore from its clients.

Although IDG Ventures focuses on early stage deals of $500,000 to $10 million, about a fourth of the new fund is also expected to be invested in later stage transactions.Venture capital investments in India fell by 21% to 405 startups, while total capital invested fell by 28% to $1.4 billion in 2016 after funding for startups hit a record in 2015.




However, venture capital firms managed to mop up a record amount of capital last year despite several slowing investments and falling valuations. Led by local affiliates of Silicon Valley heavyweights, Sequoia Capital and Accel, VC funds dedicated to India raised $2.2 billion in 2016, up from $1.5 billion in the previous year, according to Venture Intelligence. Another VC fund which made a final closein 2017 was Saama Capital, which mopped up $58 mil lion for its third fund.

IDG Ventures is led by chairman Sudhir Sethi, who has nearly two decades of experience in venture capital. His founding partner is TC Meenakshisundaram.

Focus sectors for IDG Ventures continues to be consumer media and technology, software, financials and healthcare. Some of the new investments in 2016 include gaming venture PlaySimple, Active.ai and HealthifyMe.