Early-stage venture capital (VC) firm Inventus India has launched its fourth fund that seeks to raise Rs 900 crore and has rebranded itself as Athera Venture Partners, top executives told VCCircle.
"We have rebranded to Athera –which means path and direction in Sanskrit - to signal our deep commitment to India," said Rutvik Doshi, managing director, Inventus India.
Parag Dhol, general partner, Inventus India, said that the first close of the new fund is expected in the next six months.
Typically, a fund’s first close is a milestone in a fund-raising activity for VC and private equity (PE) firms after which they start deploying capital.
With the rebranding and a larger fourth fund, the VC firm seeks to take its India story a step ahead. Doshi explained that the VC firm is raising a much larger India fund because companies today are able to address a much larger opportunity and scale at a much faster pace.
"In 2016-17, we concluded that the Indian ecosystem is maturing and has the ability to stand on its own from a dedicated fund perspective," said Doshi, who joined the company in 2012.
The new fund expects to make 18 investments in pre-series A and Series A deals in the consumer internet and enterprise technology spaces with a typical initial ticket size of $2-6 million.
It also intends to make around six seed and early-stage bets in emerging technology startups with an initial cheque size of $500,000-2 million. The fund will also continue to make follow-on investments in its winning companies. Generally, for every rupee in a startup, it will reserve 1.5-1.6 times of that money for follow-on while the winners may take up to 3-4 times the initial cheque.
Inventus (Athera), which was founded by Kanwal Rekhi, John Dougery and Samir Kumar in 2007, decided to split its India and US funds after having a common one till 2018. The India fund with its team comprising of Kumar, Doshi and Dhol went on to raise Rs 369 crore.
Dhol, who joined Inventus in 2008, said that the other reason for a larger fund is because of its focus on deep tech investments as an area of interest.
Doshi said that most of Inventus’ (Athera) Limited Partners (LPs), investors provided soft commitments to invest in the new fund. "Some of them are even doubling and tripling their commitment," he added.
Besides, the new fund also expects to get a significant contribution from its domestic LPs like its previous fund. "We were expecting to raise 20-30% of our third fund from domestic investors but we were pleasantly surprised as they constituted 60-65% of the fund. We are hoping the split between domestic and international LPs to be 50:50 in this fund," he added.
Raising big chunks of capital from Indian LPs has been traditionally difficult and very few VC firms can boast of a significant INR capital base as this investment pool is viewed as risky for a nascent market like India. But with the industry maturing, the domestic investor base for this asset class is expected to expand.
The fund launch also comes at a time of a challenging global macro-economic environment but Athera appears to be confident.
"International LPs have been around for 30-40 years and they understand that the current market situation is not a long-term trend. Some new Indian LPs may think twice but many domestic individuals, family offices and institutions will take a similar view as the international LPs," said Dhol.
In terms of the sector focus, consumer internet and enterprise technology/software-as-a-service (SaaS) have been the mainstay for the company. For the first fund, an almost equal amount was split between these two themes. For the second fund, while these two sectors remained its bread and butter, it started entering into emerging themes like artificial intelligence (AI) and machine learning (ML). The third fund added a lot more emerging technologies like deep tech, electric vehicles (EVs) and blockchain.
"Going forward from the fourth fund, one-third each will be in consumer internet, enterprise technology and the remaining one-third will be a mix bundle of emerging technology companies which will include deep tech, Web3," said Dhol.
According to him, the rest of the allocation from the fourth fund will be kept reserved for whatever technologies the market witnesses in the coming years.
Inventus (Athera) is currently actively in discussion to invest in a Web3 startup in the gaming space.
The VC firm is almost finished deploying from its third fund. It has made a dozen bets and has room to make two to three new ones.
Inventus has invested in 33 companies so far, and has made six profitable exits with multiples ranging 2-10 times via mergers and acquisitions and one via the initial public offering (IPO) of insurance aggregator PolicyBazaar.
The VC firm's recent exit was from product discovery platform Unbxd, which was bought by SaaS platform Netcore Cloud for $100 million in March.
