Venture capital firm Saama raises $58 million for third fund

BENGALURU: Saama Capital, a venture capital firm that has invested in unicorns such as Paytm and Snapdeal, has made a final close for its third fund at $58 million, or about Rs 390 crore.

With this the corpus of the Bengaluru and Silicon Valley-based VC firm will reach nearly $140 million, or about Rs 935 crore.

Saama Capital will continue its focus on the seed and series A rounds as it feels smaller fund size make it easier to return capital to its investors, or limited partners (LPs). "People like the discipline we have on size. We have always stayed in the $50-75 million range and we have publicly told our LPs we will never go over $100 million of fund ever," said Ash Lilani who founded the fund along with Suresh Shanmugham in 2011.

Before that Lilani and Shanmugham were leading venture investments for Silicon Valley Bank in the country.

Venture capital firms managed to mop up a record amount of capital last year despite a number of investments in the market slowing down and valuations starting to cool off. 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 data from Venture Intelligence.

Saama had a busy year with eight new deals, Lilani said, adding, “This year we will get back to our usual pace of 4-6 deals.”

Sectors in focus for the fund include financial technology, software as a service (SaaS) and non-technology consumer investments like Chai Point and Raw Pressery.

Saama has already deployed a third of its corpus, with recent investment in companies like wealth management app Fisdom and personal shopping assistant Mezi.

Saama had raised $54 million for its first fund when it was still under the SVB Capital Partners. Then, in 2012, it raised $26 million for the second fund.

The VC firm has also had several exits. It exited Snapdeal last year, which helped it return the entire second fund. Its previous exits include TutorVista, Sula Vineyards, App Labs and Prizm Payment Services.

Saama’s new fund comes at a time when investments into Indian startups have slowed down as most VCs are in a wait and watch mode regarding their portfolio companies.