Bengaluru: Venture capital firm India Quotient is looking to raise $130 million for its fifth fund, with nearly 80% of the commitments expected to come from global investors, its founding partner Anand Lunia told Mint in an interview.
This marks a reversal from its previous funds, for which it raised most of the capital from domestic investors. “Indian investors often want quicker exits because of their past experience with funds. When compared to the returns in the public markets, that were doing very well, there is also some pressure to match that,” Lunia said. “This is also because they are very early in this asset class. So, we are now going to flip it as we are also getting good interest from global investors.”
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India Quotient has partially exited some of its portfolio companies – such as Vyapar, Sugar Cosmetics and Giva – for liquidity in recent times. To date it has returned about ₹600 crore against the ₹1,600 crore that it has raised across all its four funds.
It returned its first fund at a multiple of 5.9x. Its second fund has returned 1.5x so far but is on course to return almost 6x, like the first fund, through secondaries in ShareChat and Sugar Cosmetics, Lunia said. In the third fund, it has so far returned 35% of the capital raised.
India Quotient’s previous backers include Gulf-based Indian billionaire BR Shetty, Flipkart co-founder Binny Bansal, RB Investments (the Singapore-based family office of Rajesh Bothra), MakeMyTrip’s Deep Kalra, and Paytm founder Vijay Shekhar Sharma.
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The firm’s previous funds were $109 million (raised in 2021), $64 million (2018), $20 million (2015) and $6 million (2013) in size.
“I prefer raising a small fund as I want to bet on companies from the idea stage that tackle tough problems. We can’t cut seed cheques with a very large fund. We are very comfortable taking risks on companies at an early stage,” Lunia said.
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The new fund, its largest ever, is expected to close by the middle of this year. It will continue backing early-stage companies that focus on solving problems for people beyond the metros. The investment firm has largely been sector-agnostic but plans to increase its focus on areas such as edtech, consumer, software and digital dopamine.
Lunia said the venture capital firm seeks to invest in companies that don’t just solve problems for the urban class. “Within edtech, we are always scouting for companies that make products at a price point of ₹100-200. In India, there is so much scale if companies price their products appropriately.”
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“Other important sectors are digital dopamine – which includes gaming, betting, and astrology – software and consumer. We are evaluating opportunities in quick commerce, and we understand that there are several verticals beyond groceries that can emerge from rapid delivery,” Lunia added.
Founded in 2011 by Lunia and Madhukar Sinha, India Quotient has backed more than 80 early-stage startups including Lendingkart, Propelld, FabAlley, Citiflo and PagarBook.
