In a groundbreaking announcement, IvyCap Ventures, a leading early-stage venture capital firm, has successfully closed its third fund, raising an impressive ₹2,100 crore in capital. This significant achievement surpasses its initial target of ₹1,500 crore, highlighting the trust and confidence investors have placed in IvyCap Ventures. With the closure of this fund, IvyCap Ventures now boasts an impressive asset under management (AUM) of ₹5,000 crore, further solidifying its position as a key player in India’s startup ecosystem.
Strong Backing from Domestic and International Investors
IvyCap Ventures’ third fund garnered substantial support from both domestic and international investors. Approximately 90% of the raised capital originated from domestic investors, demonstrating the growing appetite for venture capital investments within India. The remaining 10% primarily came from IIT alumni worldwide, showcasing the global reach and influence of IvyCap Ventures.
Founder and Managing Partner of IvyCap Ventures, Vikram Gupta, revealed that the firm exercised a greenshoe option to raise additional capital, further strengthening the fund’s financial prowess. Gupta also provided insights into the breakdown of investors, stating that 60% of the capital came from institutional investors, 20% from IIT alumni, and another 20% from family offices, marking their inaugural participation in IvyCap Ventures’ funds.
Diversified Investment Strategy
With the successful closure of its third fund, IvyCap Ventures aims to make strategic investments in approximately 25 companies at the Series A stage. The firm plans to allocate an average initial investment ranging between ₹30 to 50 crore per company, totaling around ₹1,250 crore. Additionally, IvyCap Ventures has allocated ₹400 crore (3% of the fund) for follow-on rounds and ₹100 crore (5% of the fund) for seed-stage investments, allowing them to capture the full spectrum of startup growth.
Expanding the Investment Horizon: From Series A to Seed-Stage
While IvyCap Ventures traditionally focused on Series A investments, the third fund marks the firm’s expansion into the seed-stage investment landscape. Vikram Gupta explained that the decision to enter the seed-stage realm was driven by the firm’s investors, who expressed willingness to take on the associated risks and invest 5% of the fund in seed-stage funding. This strategic move allows IvyCap Ventures to tap into the untapped potential of early-stage startups and provide the necessary funding and guidance for their growth.
Targeting Undervalued Startups: Filling the Funding Gap
India boasts a staggering number of registered startups, with approximately 125,000 currently operating in the country. However, only a fraction of these startups receive angel funding, and an even smaller portion secures Series A funding. Vikram Gupta emphasized the need for a support system that bridges the funding gap and provides guidance to promising startups that are ready for scale but often overlooked due to limited funding opportunities.
“We believe that a support system is missing where the follow-on rounds can also happen,” Gupta explained when speaking to a media outlet. IvyCap Ventures aims to address this gap by identifying undervalued startups with growth potential and providing them with the necessary financial backing and mentorship.
A Stellar Portfolio and Impressive Exits
IvyCap Ventures boasts a diverse portfolio of approximately 50 companies across various sectors, including HealthTech, ConsumerTech, DeepTech (SaaS, AI/ML, IoT), FinTech, EdTech, and emerging sectors like AgriTech and SpaceTech. The firm’s investment strategy focuses on identifying disruptive startups with innovative solutions and substantial market potential.
One of IvyCap Ventures’ notable achievements includes the realization of a ₹330 crore exit with a remarkable 22x return on Purplle, an online beauty and wellness platform. Gupta proudly shared the success story in a media interaction, stating, “We have created India’s first dragon, which is a company that gives you an exit value of more than 1x of the entire fund.” He also hinted at the potential for another significant exit with BlueStone, an online jewelry startup, which could further cement IvyCap Ventures’ position as a key player in the venture capital space.
Deploying Capital: A Strategic Approach
With 40% of the third fund’s corpus already deployed, IvyCap Ventures has made strategic investments in various companies, including Celcius, Agraga, Eggoz, ZestIot, Snitch, GradRight, Flexifyme, Beatoven.ai, and Dhruva Space. Notably, the firm has also made follow-on investments from its prior funds in companies such as LendBox, Miko, Biryani By Kilo, and BlueStone, solidifying its commitment to supporting the growth and success of its portfolio companies.
In Conclusion
IvyCap Ventures’ successful closure of its third fund, raising ₹2,100 crore, is a testament to its unwavering commitment to supporting and nurturing promising startups in India. With a diversified investment strategy, expanded focus on seed-stage investments, and a stellar portfolio of companies, IvyCap Ventures is well-positioned to play a pivotal role in shaping the future of India’s startup ecosystem. As the firm continues to deploy capital and unlock doors to startup success, entrepreneurs can look forward to a supportive and growth-oriented partnership with IvyCap Ventures.
