Among the oldest early-stage VC firms in Indian startup ecosystem, Blume Ventures marked the final close of its fourth fund, Fund IV, as it looks to continue to back India’s up-and-coming startups. Fund IV closed at $250 million, marking the largest-ever fund by the VC firm at a time when proceeds from venture capital have all but significantly dried up.
The final close of the fourth fund, which is more than double the size of its previous one, brings the Assets under management (AUM) of Blume Ventures to over $600 million. It intends to deploy the latest fund to back about 30-35 startups, an increase from the 25 that it had aimed to back in the previous fund, in the technology sector. Fund IV is said to have received the backing of Blume’s previous investors, which include some of the country’s finest family offices, global family offices, sovereign wealth funds of India and overseas and others.
“Thanks to an increasing reality of IPO (initial public offering) and M&A (mergers and acquisitions) exits, there is a resurgence of 2x founders and operators, as well as higher quality first-time founders. We’re excited for Blume to become the preferred seed partner of choice for both categories,” said Sanjay Nath, co-founder, Blume Ventures.
The fourth fund will be managed by Blume Ventures’ investment team, which will be led by Sajith Pai, Arpit Agarwal, Ashish Fafadia, Nath and Reddy. It is likely that the firm will write checks towards budding startups that operate in the edtech, fintech, healthcare, commerce and consumer internet, robotics, AI, and SaaS – areas where the 12-year-old Blume already has experience in driving investments in – across multiple rounds of funding.
“The fund size, diversity of LPs and oversubscription is a testament to the coming of age of Blume, the institution. We will continue to work and evolve with our portfolio’s needs and build large companies that India will be proud of,” Fafadia said. The fact that the round was an oversubscribed one – that is, it exceeded its original target of $200 million – bodes well for India’s startup ecosystem and investors alike. In fact, Blume said that it was “testament to the track record that continues to grow stronger.”
To date, Blume has backed several startups that have gone forward to evolve into unicorns – some of them are Unacademy, Slice, Purplle, Spinny and Ola. The VC firm raised $20 million in its first-ever fund, and drove investments in over 60 startups – including Purplle, Grey Orange, and Turtlemint. Its successor funds – Funds II and III – grew to $60 million and $102 million respectively. And in November 2021, Blume marked the first close of its fourth fund at $105 million.
This year has seen a reversal of trends as startups that were able to raise billions in fundraising in 2021, have found themselves facing turbulent waters this year. Adverse macroeconomic conditions and a persisting economic downturn in the market did not help matters as investors tightened their purse strings and re-evaluated risks, funds dried up, inflation rose, and startups struggled to stay afloat. The Indian market, which grew to such sizes that global giants such as Amazon and Google poured in billions to strengthen their foothold in the South-Asian country, suffered similar losses.