Mid-market private equity firm Xponentia Capital said Tuesday it has raised more than Rs 1,000 crore ($121 million) for its second fund, crossing its initial target of Rs 750 crore.
The PE firm launched the Xponentia Opportunities Fund II last year and marked its first close in July last year at Rs 365 crore. It is yet to officially announce the fund's final close.
“We have raised the fund almost exclusively from the domestic market,” Devinjit Singh, managing partner at Xponentia, said in a statement.
Xponentia, an investor in companies such as dining chain Barbeque Nation, fintech firm Easy Home Finance and clothing brand The Souled Store, said the new fund received commitment from its investors in its first fund as well as new domestic investors which include high-net-worth individuals (HNIs), family offices and insurance companies. It also raised capital from the Fund of Funds programme of Small Industries Development Bank of India (SIDBI).
Xponentia was founded in 2018 by former Carlyle executive Singh, PR Srinivasan, and Ajay Relan. Relan, who also founded private equity firm CX Partners, died in October 2021.
“One of the reasons I (launched) Xponentia was my conviction that Indian institutions and family offices are underinvested in alternative assets, and they would logically increase their exposure to this asset class,” Singh said. “Investor appetite for the asset class has increased faster than I imagined, and we have raised the fund almost exclusively from the domestic market.”
Through the fund, the PE firm will make investments in areas such as financial services, business services, healthcare and consumer. It has already committed Rs 270 crore across four companies—EV maker Altigreen, fintech platform Zype, The Souled Store and education financing startup Auxilo.
Xponentia closed its first fund at Rs 351 crore in 2021, with another Rs 100 crore coming in as co-investments from limited partners. It invested in eight companies through this fund, which include baby products company R for Rabbit, medical diagnostics company Medsource, and pilot training company FSTC.
The firm said it returned more than 90% of the principal from the first fund thanks to a partial exit from Barbeque Nation and a full exit from its investment in Spoton Logistics, which Delhivery bought for about $235 million in 2021.
“The success of the fund raise reflects the investors’ belief in the Xponentia Team, i.e. our ability to identify and work with first generation entrepreneurs who want to build sustainable high-quality businesses,” said Srinivasan.
