Amidst the lacklustre early and seed stage funding scenario in India this year, another VC firm is announcing raising of fresh capital today. US-based PE firm Matrix Partners, which has backed some of the popular Indian unicorn startups such as Ola and Quikr, has raised $110 million (about 730 crores INR) to boost its existing corpus of $300 million.
The funds were raised from existing investors or limited partners and will be used to continue investments in early stage startups.
With this, the company now has about $400 million in its second round fund which was set up in 2011. The company plans to have a full-fledged funding round of $300-$400 million sometime next year.
The reason why we are not raising a full-fledged fund right now is because we are more focused right now on exits.
said co-founder Avnish Bajaj.
Another possible reason for not going for setting an entirely new fund is that the company is going through a restructuring process as the other co-founder Rishi Navani is leaving the firm to start his own investment firm.
After his departure, the company plans to strengthen its core team as well as exit from its non-tech investments before it goes for setting up a new fund. It plans to exit from its initial investments in eye care chain Centre of Sight via an IPO and also looking to sell its stake in fashion brand W.
Matrix Partners was set up way back in 2006 by Avnish Bajaj and Rishi Navani. Initially, the company focussed on non-tech, multi-sector and multi-stage investments investing in retail chains, financial services, healthcare delivery companies.
However, in the past 3-4 years, the company has transitioned itself to a tech-focussed early stage investor. It has invested in a number of popular internet companies such as Ola, Housejoy, Dailyhunt, mSwipe, Practo, Limeroad, Quikr, TinyOwl, and Stayzilla to name a few.
Unlike its rivals such as Sequoia Capital or Tiger Global, Matrix Partners has focussed on making a smaller number of investments by carefully choosing their portfolio companies. And the company plans to continue with this strategy in future as well.
We will continue to be thoughtful about the bets we take as we target a higher hit ratio. Our positioning for the last 10 years has been to work very closely with the founders and that’s now well-established,
On somewhat grim funding scenario at present in India, Bajaj believes the situation to be similar to a period during 2012-13 when e-commerce companies such as Flipkart were struggling to raise fresh capital that time also.
And since Matrix Partners made some of its most successful bets (Ola, Mswipe, Limeroad) during that period, Bajaj believes that the best time to invest is right now. Matrix Partners aims to invest in seed stage and Series A funding round while remaining highly selective to invest in later-stage companies.