As the start-up ecosystem reaches its inflection point, Chiratae Ventures (formerly IDG Ventures India) expects to see four more of its portfolio companies go public in the next three years.
The early stage venture capital firm has invested in companies like Flipkart, FirstCry, Lenskart, Policybazaar, Bounce, and Curefit. Out of these, PolicyBazaar has already filed its draft red herring prospectus (DHRP) with SEBI.
Chiratae’s Partner, Venkatesh Peddi, told BusinessLine that along with the tech IPOs that have been announced in India till now, there are at least 30 more tech IPOs on the horizon. This momentum in the start-up ecosystem is also reflected in the growing limited partner’s interest in India-focused venture funds, he added.
Multiple venture capital firms from India have reported their new funds getting oversubscribed in the past few months. Last week, Chiratae Venture’s fourth fund closed at $337 million and was oversubscribed by 25 per cent.
“LPs (limited partners) are clearly seeing macro, on India level, what tech ecosystem has done, both in terms of creating large companies at unicorn valuations, and exits that have been generated already. They also see the tech IPOs that are happening now and are expected to happen. In the next three to four years India is expected have over 30 tech IPOs and that stands out for LPs, who are now putting in more money versus earlier,” said Peddi.
The firm’s fourth fund received investments from geographies including Japan, Singapore, India, and not just prominent markets like the US. About 55 per cent of the capital in Chiratae’s new fund came from India.
“We've seen very large institutions and family offices investing into the new fund, which we think is a very healthy sign. The risk capital coming from India itself is a good thing for the growth of the VC ecosystem,” Peddi added.
Out of the fourth fund, Chiratae has already committed to 30 investment deals across sectors. While the fund thesis remains focused on early-stage investments, the firm is now investing in more deep-tech solutions.
“We have specialised focus around fintech, healthtech, and agritech companies and in all these sectors, we are now looking at deeper tech solutions than what we have invested in earlier,” said Peddi. He added that if you look at some of the SaaS companies that have done well in the recent past, there have been more tech infrastructure-oriented companies like cloud-native enablers, and DevOps companies, among others.
Covid-19 has only accelerated the tech adoption on all fronts, which helps companies approach operations in a more tech-oriented manner, wherever possible.
Launched in 2006, Chiratae Ventures India Advisors has a collective $950 million under management and over 100 investee companies across consumer media & tech, SaaS, healthtech, and fintech. To date, the fund has recorded 2 IPOs, 38 exits, and 4 unicorns.