N+1 Capital, a revenue-based capital fund, has roped in investment platform LetsVenture as the founding venture partner for its debut vehicle that seeks to raise $100 million (Rs 730 crore), including a greenshoe option of $25 million (Rs 182 crore).
The debt vehicle is registered with the Securities and Exchange Board of India as a Category-II alternative investment fund (AIF), LetsVenture said in a statement.
N+1 Capital was founded by Rahul Chowdhury and Ashish Singla. Prior to founding the fund, Chowdhury was a managing partner at investment bank Kinow Capital.
He had also co-founded Reboot Systems India and DenuoSource. Singla was chief strategy officer at JetSetGo before N+1 Capital. Previously, he had led investments at Max Ventures & Industries Ltd.
The debut fund aims to make the first close at around $19 million (Rs 139 crore) next month. First close is a fundraising milestone after which funds start investing their capital.
The vehicle is sector-agnostic and will typically write a cheque of Rs 1-15 crore per firm. It will invest in companies that are at least a year-old, clocking annual net revenues of Rs 50 lakh and having positive gross margins.
Revenue-based growth capital is an alternative method of raising capital for entrepreneurs. Unlike the traditional method of raising funds from angel and venture capital investors, revenue-based growth capital avoids equity dilution for founders.
It is also said to offer regular returns to investors from fast-growing startups. This form of funding is nascent in India.
Last year, GetVantage Tech Pvt. Ltd, a revenue-based financing platform, raised funding from a clutch of investors including Venture Catalysts and Samyakth Capital.
LetsVenture
By being a founding venture partner of N+1 Capital, LetsVenture — essentially a dealmaking platform — has broadened its scope of engaging with the startup ecosystem.
In 2018, LetsVenture had announced the launch of its own open-ended angel fund. In May 2020, it floated a new platform targeted at ultra-high net-worth individuals (UHNIs) and family offices.
LetsVenture said it completed 105 funding rounds in 2020 across early and growth-stage startups.