Venture Gurukool, a platform which provides funding support to early-stage companies, plans to launch its debut venture capital fund towards the end of next month to invest in Indian startups that mirror successful businesses in China, according to a media report.
The VG Coop Fund has a target corpus of $20 million (Rs 130 crore) with a greenshoe option to raise another $20 million, Mint reported citing the firm's founder Mahendra Swarup, who was earlier a partner at private equity firm Avigo Capital Partners.
The fund aims to raise 60-70% of its corpus from India, with the rest of coming from other countries such as China, Taiwan, South Korea and Indonesia.
VG Coop Fund will seek to invest in business-to-business (B2B) and consumer technology startups.
According to the report, the fund has already tied up with three large Chinese investors.
Swarup told Mint that while VG Coop Fund will provide seed funding, the Chinese investors will participate in pre-Series A and Series A funding rounds.
He said that the partnership with Chinese investors was prompted by India's similarities with its neighbouring country in terms of demographics and consumer behaviour.
Chinese investors such as Alibaba, Tencent and Fosun have been pouring money into India’s startup ecosystem in recent years.
Venture Gurukool could not be immediately reached for comment.
The firm's services include fundraising, finance and accounts, taxation, compliance and corporate governance, HR services, digital marketing, mobile and web development, according to its website.
Swarup had earlier served as the president and the member of the executive committee of Indian Venture Capital Association (IVCA), a national organisation representing venture capital and private equity firms.
VG Coop Fund will join a host of new domestic funds that have mushroomed in the market over the past few years.
Earlier this week, equity crowdfunding platform 1Crowd marked the first close its debut angel fund at Rs 23 crore ($3.5 million).
Other relatively new domestic funds that have hit the market include Fireside Ventures, Stellaris Venture Partners and pi Ventures, which have all already hit funding milestones.
Avigo Capital
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Swarup had joined Avigo Capital in 2012. The PE firm primarily invested in Indian small and medium enterprises (SMEs) engaged in engineering and manufacturing, and domestic consumer demand-driven industries
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In 2015, Siguler Guff & Company, a limited partner in Avigo Capital, took over the responsibility of overseeing exits from the investment firm’s portfolio in a rare such move.
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Avigo’s other limited partners (LPs) include International Finance Corporation (IFC), the World Bank’s investment arm, and CDC Group Plc.
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There were differences between Avigo founder and managing director Achal Ghai over exits and performance and the growth capital and buyout fund stopped making fresh investments.
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Amid several top-level exits, S Harikrishnan, a former Avigo managing director, had started his own investment firm, Blue Lotus.
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Last October, it marked the first close of its new public market- focussed private equity fund with a commitment of $15 million (Rs 96 crore).
