Varanium Capital has announced the first close of its SEBI-registered AIF Category 1-Venture Capital Fund, ‘Varanium NexGen’.
This is a ₹200-crorefund focussed on investing in promising early-stage fintech start-ups.
Varanium Capital is a boutique asset management company with an AUM of over ₹5,000 crore.
The fund is led by Aparajit Bhandarkar, Managing Partner, Venture Capital.
“In terms of unicorns’ contribution, fintech is one of the largest sectors. Of the 266 unicorns, 50 are in the fintech space; in India, there are 25 unicorns, of which five or six are in the fintech space. We think that fintech should have at least 10-12 more unicorns coming. I have been associated with the financial sector since 2002; my team’s background has been similar, and we want to play to our strengths,” Bhandarkar explained.
The fund will be invested over 3-3.5 years. “We don’t want to do it all at one go. You make mistakes when you write cheques too quickly. Secondly, new start-ups are emerging every week with new ideas, so you want to see enough ideas and then invest. Also, you want to play across the cycle. Today, you have a cycle in financial services that looks quite depressing. Three years later, maybethere may be a boom in financial services. So we want to play across the cycle and not stay concentrated on one cycle,” said Bhandarkar.
“In about 3.5 years, we will deploy in about 30-35 start-ups, putting about ₹3-5 crore in each start-up initially,” he added.
The writer is an intern with BusinessLine’s Mumbai bureau