3one4 Capital, an early-stage venture capital (VC) firm, has raised Rs 400 crore for its third fund. The new fund, called Continuum I, will be used for follow on investments in existing portfolio companies with cheque sizes ranging from $3 million to $5 million.
Started in 2015, 3one4 Capital is among the most active seed and early-stage investors in the country. It manages a combined corpus of Rs 800 crore with investments in over 50 startups including Licious, Open, Betterplace, DarwinBox, Faircent, Bugworks, Pocket Aces, YourStory, and Tracxn.
Its latest fund is backed by Emory Investment Management, a large US endowment that manages the assets of the Emory Group, Sojitz - a leading Japanese corporation, N R Narayana Murthy's Catamaran, Infina, an investment company owned by the Kotak family, and a few other family offices.
For Emory Investment Management, which manages a global portfolio of $7 billion, it is their largest investment in an Indian VC, while Japan’s Sojitz has recently announced opening an office in Bengaluru along with this deal.
“These new LPs will explore co-investment opportunities in rounds raised by the portfolio companies and will work closely with the founding teams to help deploy and scale their value propositions globally,” said Pranav Pai, founder and managing partner, 3one4 Capital.
The fund's objective is to develop a “strategic and long-term partnership with top-tier institutional pools of capital globally and help improve access to high-quality growth capital for the portfolio companies across 3one4 Capital's funds,” 3one4 Capital said.
It also announced a dedicated seed-stage fund of Rs 45 crore. The vehicle will be used to invest between Rs 50 Lakh and Rs 3.5 crore in idea-stage and seed-stage companies.
Earlier, 3one4 had raised Rs 250 crore for Fund 2 in January 2018. Its first fund of Rs 100 crore, solely funded by the family office of T V Mohandas Pai, the former CFO and director of Infosys, was launched in 2016.
“At 3one4, we firmly believe that the Indian startup ecosystem has achieved critical mass and now supports the development of market-leading businesses at scale,” said Siddarth Pai, founder and managing partner, 3one4 Capital. “These companies combine deep domain expertise, sustainable competitive advantages, and uncompromising customer experiences to build a gravity well around themselves.”
3one4 Capital’s fund-raise comes at a time when the Indian start-up funding is at an all-time high. As per estimates by industry body Nasscom, start-ups raised $4.4 billion in the first nine months of 2019.
Last week, Accel India, a larger VC, also closed its sixth fund at $550 million.