Leo Capital to launch third fund to provide financing to Indian start-ups

Singapore-based Leo Capital is set to float its third fund with a corpus of Rs 125 million to provide early stage financing to consumption focussed technology start-ups in India. The proposed fund comes on the back of deploying two funds totalling $106 million.

Leo Capital, set up by Rajul Garg and Shwetank Verma in 2017, is focused on two investment themes. Firstly, technology based India domestic consumption startups – consumer internet, commerce, healthtech, logistics, edtech, fintech, insurtech etc. And secondly, global technology companies from India e.g., SE Asia centric companies or global SaaS companies.

Shwetank Verma, general partner at Leo said India’s maturing startup ecosystem has moved well beyond just consumer apps. There is a booming domestic stock market that has shown investors a path to liquidity that has not always been there.

India’s public market could grow to more than $5 trillion, making it the fifth largest in the world, within three years–the country just recently passed the $3.5 trillion threshold. There are 150 private companies waiting in the wings that could potentially list on the market within the next three years, he said.

Leo has made 32 investments since 2018 and as a mark of success Leo Capital has exited two. Twenty have gone on to raise further rounds.

The Indian start-up ecosystem presents a blossoming opportunity for global investors. India is set to surpass the record level of total investment it saw last year when venture funding totalled $33.8 billion.

Indian startups received $26.7 billion in the first three quarters of this year alone, putting the nation on track for well more than $35 billion in investment by the end of 2021, Leo said in a statement.

Since 2014, over 6,500 Indian startups have raised over $81B in funding and this is growing exponentially year on year. This includes 66 startups that are in the Unicorn Club (at least a $1B valuation), whose combined valuation is $210B.  This number is set to reach 100 startups by 2023.