Indian venture capital player Kae Capital became the latest firm to raise India-focussed funds, joining the likes of Sequoia, Accel, Elevation Capital, and Matrix Partners. This comes after it announced the final close of its third – and latest fund – at ₹767 crores (about $94 million). Fund III has caught the eye of both existing and new limited partners in the domestic and international area alike – such as Old Mutual Wealth, Velo Partners, and Finex, HDFC Holdings and Small Industries Development Bank of India.
The fund also included the contributions of Infosys co-founder Kris Gopalakrishnan, Blackbuck co-founder Rajesh Yabaji, Nazara founder Nitish Mittersain, along with Jupiter CEO Jitendra Gupta, MakeMyTrip founder Deep Kalra, and others. The family offices of Hero Enterprise’s Sunil Kant Munjal, DSP Investment Managers’ Hemendra Kothari, and others also invested in Kae Capital’s Fund III.
“The Indian startup ecosystem has grown exponentially since we started Kae Capital 10 years back. Having been around for so long, we have understood how tough it is to build great companies. We believe we are a true all-weather partner to our founders, helping them navigate through good, and most importantly tough times, when they need us the most,” said Sasha Mirchandani, founder and managing partner, Kae Capital.
Almost 60% of the total corpus for the latest fund is from domestic investors, which comes at a time when companies and startups are scrambling for funds and valuations have dropped alongside adverse macroeconomic conditions and falling stocks in the market.
The third fund, which was oversubscribed and nearly double of its $53 million second fund, will enable the ten-year-old Kae Capital to continue in investing in companies in early-stage funding, which includes the pre-seed to pre-Series A and Series A funding rounds. The average size of the cheques will be between $1-3 million, which is a steep increase from the cheques written in the first and second funds – the cheque size came to $50,000-1 million for the earlier funds.
Sector-wise, the oversubscribed Fund III will drive investments in fintech, SaaS, consumer tech, B2B commerce, healthtech, D2C brands and gaming. So far, Kae invested in several companies from the third fund launched last year, and five of them were successful in raising funds in follow-on rounds.
It is expected to back about 25 early-stage startups over the next two years and add to the 79 startups that Kae has invested in so far. Almost 40% of the total corpus is reserved for new bets, Mirchandani said.