3one4 Capital closes its fourth fund at $200 million

Early-stage venture capital firm 3one4 Capital has closed its fourth early-stage fund at $200 million (₹1,600 crore). The fund was oversubscribed within 2.5 months of its launch.

Indian banks, mutual funds, US university endowments, global sovereign funds, global corporations and insurance companies and few Indian family offices were some of the investors of the fund. Over 90 per cent of the funds came from institutional investors.

3one4 Capital has raised money for six funds so far. In total, the firm is managing ₹3,710 crore (about $510 million) of committed capital and has over ₹6,000 crore ($750 million) in assets under management. The cumulative market cap of the companies in the portfolio is over $7.5 billion (₹60,000 crore). 

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The launch of this fund also marks 3one4 Capital’s debut at GIFT IFSC and its first offshore vehicle. The first close of Fund IV was completed in March 2023, and over five deals have already been approved or invested in. The final close is expected by the end of Q1 FY24. Fund III (2020 vintage) was also oversubscribed from its initial $150 million target and completed its final close at $200 million.

Pranav Pai, Partner, 3one4 Capital, said, “We are building 3one4 Capital to be the leading Indian homegrown venture capital firm, and this requires us to set an example of decadal discipline and consistent performance. We are grateful to our investors for endorsing our decision to maintain our intentional approach in the Indian early-stage. Our investor base now combines an intellectually diverse and globally oriented pool of resources that provide a purposeful competitive edge to the firm and its portfolio companies. We can now continue to direct more meaningful capital to discover the next set of generational tech leaders from India”. 

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3one4 Capital plans to continue its early-stage strategy, focusing on sectors such as consumer Internet, SaaS, fintech, and enterprise and SMB digitisation, while increasing investments in newer areas such as digital health, climate tech, and more. The firm aims to invest in early-stage start-ups with larger cheque sizes, ranging from pre-seed to Series A, with cheques between $0.5 million to $5 million. The median cheque size for these investments will be in the $1.5-$3 million range, and the firm will also be looking at post-seed and pre-Series A funding rounds. 

Anurag Ramdasan, Partner, 3one4 Capital, said, “We will double down on India-specific businesses, given our lessons from market leaders such as Licious, WeRize, and KukuFM, and will remain bullish on India’s consumption patterns. We also plan to continue deploying more capital into cross-border SaaS investments, given our positive experience partnering with leaders like DarwinBox, BetterPlace, and others. With our institutionalised and diversified investor base, it allows us to support our portfolio founders with a more global perspective and bring in more long-term capital.”

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