Early-stage investor Indian Angel Network (IAN) said Monday it has marked the first close of its second venture capital fund, a year after it began seeking commitments.
The IAN Alpha Fund secured commitments of Rs 355 crore ($42.6 million), the angel network said.
The first close is a milestone that allows alternative investment firms to start deploying capital.
The fund has a target corpus of Rs 1,000 crore. This comprises a base corpus of Rs 650 crore and an overallotment option of Rs 350 crore. The IAN had aimed to mark the first close by December 2022 or January 2023 but fundraising was delayed, presumably due to macroeconomic challenges and departure of key executives.
The Alpha Fund counts state-run Small Industries Development Bank of India (SIDBI) and Self-Reliant India (SRI) Fund among its limited partners. Some of the firm’s LPs from its first fund also backed the second vehicle.
In August, VCCircle reported SRI Fund's Rs 100 crore commitment to the IAN’s second fund.
Through the fund, the IAN aims to make early-stage investments in about 100 companies in manufacturing, hardware, agriculture, electric vehicles, clean energy, education, and healthcare, among others.
The fund’s investments are divided into three categories or buckets. The first bucket includes joint investments with angel investors, with the IAN’s average cheque size at about Rs 1.2 crore. The second category includes top-up investments in firms where the IAN has invested previously. The third bucket comprises investments beyond its portfolio, with participation from other investors.
“We intend to not only focus on India’s metros to harness, but also target tier 2 and 3 cities. Female founders will also be an area of focus,” said Padmaja Ruparel, co-founder of the IAN and senior managing partner of the IAN Alpha Fund.
In addition to Ruparel, the fund’s managing partners are Priyank Garg, Sarika Saxena and Rajnish Kapoor.
The IAN started as an angel network in 2006 and floated its maiden VC fund in 2017, which had a corpus of Rs 375 crore and was closed in 2019. IAN Fund 1 invested in companies such as Phool.co, Dhruva Space, WebEngage, Wow! Momo and Propelld.
Besides its VC funds, IAN Group includes early-stage investment platforms like IAN Angel Group and BioAngels.
Notably, the IAN is the second firm to mark the first close of its fund in recent days. Last week, early-stage VC firm Sprout Venture Partners, which counts marketing-tech platform Pixis and employee engagement platform AdvantageClub, in its portfolio made the first close of its second fund at $10 million.