Ventureast makes first closing of its new fund

Fund lines up investments in three new startups - Find Me A Shoe, OS Labs & a digital-health startup

Ventureast, an early-stage venture capital (VC) fund, has made the first closing of its sixth fund — Ventureast Proactive Fund II — which would be $150 million in size.

The fund has received $83 million in commitment from existing as well as new investors and it expects to make final closing in the next six months, said Sarath Naru, managing partner of Ventureast. The investors include multilateral agencies, insurance firms, existing investors and others. The investors do not include family offices.

According to Naru, the environment for fund-raising, especially for India-focused funds, is challenging. One of the main reasons is exit avenues. For instance, in China exits would typically take around three years, against seven years for India. However, the return is similar in both the countries.

Ventureast Proactive Fund II will invest in seed and early-stage businesses where technology is a strong differentiator and not just an enabler, he added. The fund has already lined up investments in three new start-ups — Find Me A Shoe, OS Labs, and a digital-health start-up.

“We continue to invest in businesses where capital is not the primary competitive advantage, but ‘technology’ is. While huge investments have been made in tech businesses over the past five years, the emphasis today is on the kind of start-ups where technology will be the primary differentiator,” said Naru.

The VC firm also said it would look at the second fund for life science and healthcare in the range of over $100 million. Ventureast’s earlier fund size in this space was $94 million.

Ventureast has been investing in India since 1997, managing close to $400 million. The company has a diverse portfolio of 100 investments in technology, healthcare and clean environment. Ventureast is possibly the only Indian fund manager that has dedicated funds and teams for each sector – life sciences and healthcare, and separately for technology-driven businesses.