The world of Venture Capital (VC) has been instrumental in fostering innovation and entrepreneurship globally. This sector provides a financial bedrock for brilliant ideas and transformative businesses. VC is even more relevant in a burgeoning startup ecosystem like India’s.
So let’s take a closer look at the top VC funds propelling the startup culture in the nation.
What is a Venture Capital (VC)?
Before we dive in, it’s crucial to understand what a VC fund is. A Venture Capital fund is a financial institution that provides capital to startups or small businesses, which display promising high-growth potential.
These funds are often crucial for startups in the early stages, lacking access to capital markets. They also provide strategic guidance, offering a strong network, mentoring, and sometimes operational support to portfolio companies.
So why has India become such an attractive destination for VC funding? The answer lies in the thriving startup ecosystem. The last decade has seen a meteoric rise in the number of Indian startups, with an increasing number achieving the coveted ‘Unicorn’ status. This rise has been fueled by VC funding, signaling India’s arrival on the global startup stage.
Factors to Consider when Evaluating VC Funds
When evaluating VC funds, various factors come into play. This includes-
- Their portfolio of companies,
- Funding size they can commit,
- Their track record of success,
- The sectors they focus on,
- Strength of the VC’s network.
These elements provide a holistic view of a VC fund’s potential.
Top VC Funds in India Categorized by Investment Stage
Now, let’s delve into the main course, the top 20 VC funds in India, categorized by the investment stage.
Seed Stage VC Funds
Seed stage VC funds are early believers, providing the initial capital injection to transform ideas into viable businesses.
India Quotient
- Overview and History: Founded in 2012 by Anand Lunia and Madhukar Sinha, India Quotient is a VC fund that provides seed funding to startups in India. It specializes in investments in the early and seed stages and also provides follow-on investments.
- Notable Investments: ShareChat, Sugar Cosmetics, Lendingkart, and iimjobs.
- Investment Focus: India Quotient invests across several sectors, including Fintech, Consumer tech, and SaaS.
- Size of the Fund: Their recent fund (Fund 4) was launched with a target corpus of $80-100 million.
- Key People: Anand Lunia and Madhukar Sinha
- Success Stories: Successful exits include iimjobs (acquired by Info Edge) and Holachef (acquired by Foodpanda).
YourNest Venture Capital
- Overview and History: YourNest Venture Capital is an early-stage fund founded in 2011 that invests in the new connected economy represented by the Internet of Things, Electronic System Design, Artificial Intelligence, Advanced Robotics, Enterprise Software, and the Mobile Internet.
- Notable Investments: Uniphore, Locus, myGate, and SmartQ.
- Investment Focus: They focus mainly on deep tech sectors such as SaaS, AI, IoT, and Robotics.
- Size of the Fund: Their recent fund (Fund II) has a corpus of INR 300 Crores.
- Key People: Sunil K Goyal, Dr. Vivek Mansingh, and Girish Shivani.
- Success Stories: One of their success stories is Uniphore, a speech recognition solutions company that raised $140 million in a Series D round in 2021.
3one4 Capital
- Overview and History: 3one4 Capital is an early-stage venture capital firm based in Bangalore. Founded by Pranav Pai and Siddarth Pai, the sons of former Infosys CFO T.V. Mohandas Pai, in 2016.
- Notable Investments: BetterPlace, OpenApp, Darwinbox, and Tracxn.
- Investment Focus: They invest in technology and data-driven businesses across Consumer Media & Tech, SaaS, Fintech, Edtech, Healthtech, and more.
- Size of the Fund: They manage assets of over $100M across multiple funds.
- Key People: Pranav Pai and Siddarth Pai.
- Success Stories: Some successful exits include LookUp (acquired by NowFloats), and Tapzo (acquired by Amazon).
Beenext
- Overview and History: Beenext is a global VC firm that was founded by Teruhide Sato in 2015. It has backed over 180 companies across the world.
- Notable Investments: Citrus Pay, BharatPe, NoBroker, and Servify.
- Investment Focus: Beenext focuses on several sectors, such as E-commerce, Fintech, Healthtech, Agtech, and Software Services.
- Size of the Fund: They manage several funds, with the latest (BEENEXT Emerging Asia Fund) having a corpus of $110 million.
- Key People: Teruhide Sato.
- Success Stories: A significant exit includes Citrus Pay, which was acquired by PayU for $130 million in 2016.
Summary Table
Here’s the summary table of the seed stage VC funds covered in this section-
| VC Fund | Founded Year | Notable Investments | Investment Focus | Recent Fund Size | Key People |
|---|---|---|---|---|---|
| India Quotient | 2012 | ShareChat, Lendingkart | Tech, Fintech | $60M | Anand Lunia, Madhukar Sinha |
| YourNest Venture Capital | 2011 | Uniphore, myGate | Tech, Deep Tech | $45M | Sunil Goyal, Girish Shivani |
| 3one4 Capital | 2016 | Licious, BetterPlace | Tech, Consumer | $100M | Pranav Pai, Siddarth Pai |
| Beenext | 2015 | Shadowfax, Open | Tech, Fintech | $110M | Teruhide Sato |
Early Stage VC Funds
Early-stage VC funds provide the necessary fuel for fledgling startups to grow and scale their operations.
Accel India
- Overview and History: Accel India is the Indian arm of the famous global VC firm Accel (formerly known as Accel Partners). Accel India was established in 2008, and it operates independently with a focus on Indian startups.
- Notable Investments: Flipkart, Swiggy, Freshworks, and Myntra.
- Investment Focus: Accel India focuses on several sectors including Consumer, Enterprise SaaS, Fintech, Healthcare, and B2B.
- Size of the Fund: They manage several funds, with their recent fund (Fund VI) being a $550 million fund.
- Key People: Prashanth Prakash, Subrata Mitra, and Shekhar Kirani.
- Success Stories: Some successful exits include Myntra (acquired by Flipkart), and Mu Sigma (IPO).
Matrix Partners India
- Overview and History: Matrix Partners India is an affiliate of the global VC firm Matrix Partners. Established in 2006, it has made over 60 investments in India across various stages.
- Notable Investments: Ola, Practo, Dailyhunt, and Quikr.
- Investment Focus: Matrix India’s focus areas include Consumer Internet, Fintech, B2B, and SaaS.
- Size of the Fund: Their recent fund (Fund IV) is a $300 million fund.
- Key People: Avnish Bajaj, Rishi Navani, and Vikram Vaidyanathan.
- Success Stories: Successful exits include CentreVerde (acquired by Accel Partners), and Itzcash (acquired by Ebix).
Blume Ventures
- Overview and History: Founded in 2010 by Karthik Reddy and Sanjay Nath, Blume Ventures is an India-centric VC fund that provides seed and pre-series A funding.
- Notable Investments: GreyOrange, Unacademy, Turtlemint, and Purplle.
- Investment Focus: They invest in several sectors including Tech Infrastructure, Healthtech, Edtech, Fintech, and Consumer.
- Size of the Fund: Their recent fund (Fund III) was a $102 million fund.
- Key People: Karthik Reddy and Sanjay Nath.
- Success Stories: Exits include Taxiforsure (acquired by Ola), and Zipdial (acquired by Twitter).
Kalaari Capital
- Overview and History: Established in 2006 by Vani Kola, Kalaari Capital is an early-stage technology-focused VC firm.
- Notable Investments: Cure.fit, Dream11, Snapdeal, and Myntra.
- Investment Focus: Kalaari Capital invests in multiple sectors including E-commerce, Mobile, Technology, and SaaS.
- Size of the Fund: They manage several funds, with one of their recent fund being a $200 million fund.
- Key People: Vani Kola and Kumar Shiralagi.
- Success Stories: Successful exits include Myntra (acquired by Flipkart).
Lightbox Ventures
- Overview and History: Lightbox Ventures is a Mumbai-based VC firm founded by Sandeep Murthy in 2014. It was created by spinning out of two previous funds, Sherpalo Ventures and Kleiner Perkins.
- Notable Investments: Droom, Faasos, and Embibe.
- Investment Focus: They primarily focus on technology-enabled startups in the Consumer Services and Products sectors.
- Size of the Fund: Their recent fund (Fund III) was a $209 million fund.
- Key People: Sandeep Murthy, Siddharth Talwar, and Prashant Mehta.
- Success Stories: One of their notable exits was GreenDust, a reverse logistics service provider.
Stellaris Venture Partners
- Overview and History: Founded in 2016 by Alok Goyal, Rahul Chowdhri, and Ritesh Banglani, Stellaris Venture Partners is an early-stage, technology-focused VC firm.
- Notable Investments: Noticeboard, Whatfix, SaaS Labs, and MamaEarth.
- Investment Focus: They primarily invest in global SaaS, applications for Indian SMBs, and Consumer tech.
- Size of the Fund: Their recent fund is a $160 million fund.
- Key People: Alok Goyal, Rahul Chowdhri, and Ritesh Banglani.
- Success Stories: Their most notable exits include Vogo, Shop101, and Swiflearn.
Summary Table
Here’s the summary table of the Early stage VC funds covered in this section-
| VC Fund | Founded Year | Notable Investments | Investment Focus | Recent Fund Size | Key People |
|---|---|---|---|---|---|
| Accel India | 2005 | Flipkart, Swiggy | Tech, Consumer | $550M | Subrata Mitra, Prashanth Prakash |
| Matrix Partners India | 2006 | Ola, Practo | Tech, Consumer | $300M | Avnish Bajaj, Rishi Navani |
| Blume Ventures | 2010 | Unacademy, Purplle | Tech, Consumer | $102M | Karthik Reddy, Sanjay Nath |
| Kalaari Capital | 2011 | Cure.fit, Urban Ladder | Tech, Consumer | $160M | Vani Kola |
| Lightbox Ventures | 2014 | Melorra, Furlenco | Tech, Consumer | $200M | Sandeep Murthy |
| Stellaris Venture Partners | 2016 | Mamaearth, mFine | Tech, Consumer | $160M | Ritesh Banglani, Alok Goyal |
Growth Stage VC Funds
Growth stage VC funds provide a significant capital injection to help startups scale massively, both nationally and internationally.
Sequoia Capital India
- Overview and History: Sequoia Capital India, the Indian arm of the globally renowned VC firm Sequoia, was established in 2006. It’s one of the most active VC investors in India, often leading funding rounds.
- Notable Investments: Byju’s, Zomato, Oyo Rooms, and Freshworks.
- Investment Focus: Sequoia India invests across sectors, including Technology, Consumer, and Healthcare.
- Size of the Fund: Their recent fund (Fund VII) is a $1.35 billion fund.
- Key People: Shailendra Singh, Mohit Bhatnagar, and GV Ravishankar.
- Success Stories: Some successful exits include Freecharge (acquired by Snapdeal), and Prizm Payments (acquired by Hitachi).
Nexus Venture Partners
- Overview and History: Nexus Venture Partners is an India-U.S. cross-border VC firm, founded in 2006, that provides funding for early and growth-stage startups.
- Notable Investments: Postman, Delhivery, Druva, and Zolo.
- Investment Focus: Nexus focuses on Technology, Consumer Services, and Business Services.
- Size of the Fund: Their recent fund (Fund V) is a $450 million fund.
- Key People: Naren Gupta, Sandeep Singhal, and Suvir Sujan.
- Success Stories: Successful exits include Netmagic (acquired by NTT), and Gluster (acquired by Red Hat).
SAIF Partners
- Overview and History: SAIF Partners is a leading Asian private equity firm, started in 2001, that provides growth capital to companies in Asia, including India.
- Notable Investments: Paytm, Swiggy, Meesho, and Rivigo.
- Investment Focus: SAIF Partners invests in Internet, ITES, Consumer Products, and Services.
- Size of the Fund: Their recent fund (Fund VII) is a $400 million fund.
- Key People: Ravi Adusumalli, Deepak Gaur, and Mukul Singhal.
- Success Stories: Successful exits include Makemytrip (IPO), and Just Dial (IPO).
Helion Venture Partners
- Overview and History: Founded in 2006, Helion Venture Partners is an India-focused, stage-agnostic venture fund, investing in technology-powered and consumer-service businesses.
- Notable Investments: BigBasket, redBus, and Livspace.
- Investment Focus: They invest in multiple sectors including Consumer Internet, Enterprise Software, and Fintech.
- Size of the Fund: They manage several funds, with one of their recent fund being a $300 million fund.
- Key People: Sanjeev Aggarwal, and Ashish Gupta.
- Success Stories: Successful exits include redBus (acquired by Ibibo Group), and Makemytrip (IPO).
Norwest Venture Partners
- Overview and History: Norwest Venture Partners is a global venture capital firm that was founded in 1961. It has an India-focused team that backs companies across stages.
- Notable Investments: Pepperfry, Quikr, and Swiggy.
- Investment Focus: Norwest focuses on several sectors, such as Consumer, Enterprise, and Healthcare.
- Size of the Fund: Their recent fund (Fund XV) is a $2 billion global fund.
- Key People: Promod Haque, Matthew Howard, and Jeff Crowe.
- Success Stories: Successful exits include Yatra (IPO), and Quikr (IPO).
Inventus Capital Partners
- Overview and History: Founded in 2007, Inventus Capital Partners is a US-India venture firm managed by successful entrepreneurs and industry-operating veterans.
- Notable Investments: PolicyBazaar, Insta Health, Savaari
- Investment Focus: Consumer and Business services delivered over the internet
- Size of Funds: $51 million for the third fund
- Key People: Kanwaljit Singh, Rutvik Doshi
- Success Stories: Insta Health (acquired by Practo), redBus (acquired by Naspers).
Chiratae Ventures (formerly IDG Ventures)
- Overview and History: Chiratae Ventures, formerly known as IDG Ventures India, was founded in 2006. They have been pioneers in technology investing and are constantly on the lookout for innovation.
- Notable Investments: FirstCry, Lenskart, Myntra
- Investment Focus: Consumer media, Software, Health tech
- Size of Funds: $275 million for the fourth fund
- Key People: Sudhir Sethi, TCM Sundaram
- Success Stories: Myntra (acquired by Flipkart), Manthan (exit to Norwest Venture Partners).
Aavishkaar Venture Management
- Overview and History: Founded in 2001, Aavishkaar Venture Management Services is a pioneer in early-stage impact investing. They are committed to building an ecosystem that supports sustainable businesses.
- Notable Investments: Nepra, MPOWER, AgroStar
- Investment Focus: Impact Investing, Social Enterprises
- Size of Funds: $94 million for the sixth fund
- Key People: Vineet Rai, Anurag Agrawal
- Success Stories: Milk Mantra (exit to Fidelity Growth Partners Asia).
Bharat Innovation Fund
- Overview and History: Founded in 2018 by IIM Ahmedabad’s Centre for Innovation Incubation and Entrepreneurship (CIIE), Bharat Innovation Fund is an early stage deep-tech and IP-focused fund.
- Notable Investments: ToneTag, Entropik
- Investment Focus: Deep Tech across various sectors
- Size of Funds: $100 million for one of their recent fund
- Key People: Ashwin Raguraman, Sanjay Jain
- Success Stories: Not available as the fund is relatively new.
Prime Venture Partners
- Overview and History: Established in 2011, Prime Venture Partners is an early-stage VC firm focusing on tech startups in India. They provide hands-on support and work closely with portfolio companies.
- Notable Investments: Ezetap, Sigtuple, AffordPlan
- Investment Focus: Fintech, Healthcare, Education, Consumer
- Size of Funds: $72 million for the third fund
- Key People: Sanjay Swamy, Amit Somani, Shripati Acharya
- Success Stories: ZipDial (acquired by Twitter), Ezetap (significant follow-on funding rounds).
Summary Table
Here’s the summary table of the growth stage VC funds covered in this section-
| VC Fund | Founded Year | Notable Investments | Investment Focus | Recent Fund Size | Key People |
|---|---|---|---|---|---|
| Sequoia Capital India | 2000 | Byju’s, Zomato | Tech, Consumer, Healthcare | $1.35B | Shailendra Singh, Mohit Bhatnagar |
| Nexus Venture Partners | 2006 | Postman, Delhivery | Tech, Consumer Services | $450M | Naren Gupta, Sandeep Singhal |
| SAIF Partners | 2001 | Paytm, Swiggy | Internet, ITES | $400M | Ravi Adusumalli, Deepak Gaur |
| Helion Venture Partners | 2006 | BigBasket, redBus | Consumer Internet, Enterprise Software | $300M | Sanjeev Aggarwal, Ashish Gupta |
| Norwest Venture Partners | 1961 | Pepperfry, Quikr | Consumer, Enterprise, Healthcare | $2B (global) | Promod Haque, Matthew Howard |
| Inventus Capital Partners | 2007 | PolicyBazaar, Insta Health | Tech, Consumer | $51M | Kanwaljit Singh, Rutvik Doshi |
| Chiratae Ventures (formerly IDG Ventures) | 2006 | FirstCry, Lenskart | Tech, Consumer | $275M | Sudhir Sethi, TCM Sundaram |
| Aavishkaar Venture Management | 2001 | Nepra, MPOWER | Impact Investing, Social Enterprises | $94M | Vineet Rai, Anurag Agrawal |
| Bharat Innovation Fund | 2018 | ToneTag, Entropik | Tech, Deep Tech | $100M | Ashwin Raguraman |
| Prime Venture Partners | 2011 | Ezetap, Sigtuple | Tech, Fintech | $72M | Sanjay Swamy, Amit Somani |
Future of Venture Capital in India
Let’s dig into the future of venture capital in India:
Increasing Interest in Indian Startups
The success stories of Indian startups have attracted the global investment community. With unicorns like Flipkart, Paytm, Byju’s, and Zomato, there’s growing confidence in India’s startup ecosystem. International VC funds like SoftBank, Tiger Global, and Sequoia Capital continue to invest heavily in Indian startups. This trend is expected to continue, with Indian startups forecasted to attract more cross-border investments.
Focus on Deep Tech
Deep tech startups, those based on substantial scientific or technological innovation, are gaining increased attention from VC funds. Areas such as AI, ML, IoT, blockchain, and robotics are seeing significant investments. For example, YourNest Venture Capital focuses primarily on deep tech sectors, indicating the growing interest in this space. We can expect VC funds to continue earmarking substantial resources for startups operating in these high-growth, high-potential sectors.
More Late-stage Investments
With several Indian startups maturing and reaching unicorn status (valuation of over $1 billion), there’s an increasing trend towards late-stage investments. Funds like SoftBank and Sequoia’s Surge are leading this trend. This shift towards later-stage funding indicates that VC firms are now looking to invest in startups with proven business models and are ready to scale up.
Increase in Corporate VC
More corporations are setting up their own VC arms to invest in promising startups directly. This trend allows corporations to tap into innovative ideas while providing startups with necessary funding. For instance, Infosys has set up its fund called Infosys Innovation Fund. Google, Intel, and Qualcomm also have their VC arms actively investing in India. The trend of corporate VC is expected to grow further in the future.
Emerging Sectors
While sectors like consumer tech, fintech, and e-commerce continue to dominate VC investments, newer sectors are emerging. For instance, investments in sectors like edtech, healthtech, agritech, and spacetech have seen an upward trend recently. VC funds like Omnivore are focusing exclusively on agritech startups.
Growing Focus on ESG Investments
VC funds are showing an increasing interest in startups contributing to Environmental, Social, and Governance (ESG) factors. These startups address environmental issues, societal problems, and have sound governance structures. For instance, Lightbox Ventures invests in sustainable consumer technology businesses. This shift is partly due to pressure from investors and partly because these startups have proven to be good business.
Government Support
With initiatives like the Startup India campaign and the Fund of Funds for Startups (FFS), the Indian government has been actively promoting entrepreneurship. This supportive regulatory environment is expected to further bolster VC activity in India.
In conclusion, the future of venture capital in India looks bright, with increasing investments, a maturing startup ecosystem, and strong government support. However, challenges remain, including regulatory hurdles, exit concerns, and the need for more homegrown VC funds.
Conclusion
Venture Capital Funds hold a pivotal role in India’s startup ecosystem, offering more than just monetary investment. Their strategic guidance and robust networks can often make the difference between failure and success. It’s exciting to see how these top 20 VC funds will shape India’s startup narrative in the years to come.
Frequently Asked Questions
Some of the top VC funds in India include YourNest, 3one4 Capital, Accel India, Matrix Partners, Sequoia Capital, Nexus Venture Partners, and SAIF Partners, among others.
Key factors to consider include the fund’s track record, management team, investment focus, fund size, investment stage preference, and exit history.
CA Yash Jain
Bain & Co.
5000+ Students Trained in the field of Investment Banking, FRM & CFA