Dhruv Dhanraj Bahl, former chief operating officer of fintech unicorn BharatPe, has set up a venture capital firm and floated its maiden fund targeting to raise Rs 120 crore with an equal additional amount as greenshoe option.
Eternal Capital, the VC firm, received regulatory approval for the fund in November 2023. It has since received soft commitment from several entrepreneurs to the tune of Rs 102 crore already, Bahl told VCCircle.
The fund’s investors include former BharatPe chief executive Suhail Sameer, MakeMyTrip founder Deep Kalra, PolicyBazaar co-founder Tarun Mathur, VLCC chief executive Vikas Gupta, and Bharat CEO Nalin Negi, among others.
“It's fund by an operator, for operators, and from operators,” said Bahl. He said the idea behind launching the fund is to give people easier access to institutional deals through a managed fund and allow them to leverage their social and intellectual capital.
Bahl has been investing in his personal capacity over the last six years. He has made over 50 angel investments and backed startups such as Stupa Sports Analytics, Basic Home Loans, ApniBus, Volt Money, DrinkPrime, AdmitKard, GenWise, Vama.
“In the last six years, my idea was that I invest in startups where I connect with the operator and the problem they are solving and help them beyond (providing) capital, where I could actually add value,” Bahl said. “That thesis has resulted in me backing strong operators who are solving real-world problems.”
The fund will rely on its network of limited partners to offer guidance, mentorship, and connectivity beyond capital and curate deals for its partners.
Eternal Capital plans to deploy 75% of its capital across seed and pre-Series A rounds. It has reserved 25% of the targeted Rs 120 crore for follow-on rounds, which could go on to Series A.
The fund, mostly sector-agnostic, will invest nearly $250,000 to $300,000 in each company, making about 30-35 investments over the next three years. It might tap the greenshoe option once the current capital is deployed.
Bahl said he is excited about certain aspects of fintech, software-as-a-service, consumer sectors, besides clean energy, and sports and gaming.
Eternal Capital has discounted the traditional 2/20 fee structure followed by VC and private equity funds. Instead, the fund is incentivising its limited partners by offering a stratified carry and hurdle rate with increased investment and returns. Further, the fund has capped its management fee for five years, among other changes.