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Blume Ventures marks final close of new fund, overshoots target
From L to R - Karthik Reddy, Ashish Fafadia and Sanjay Nath, partners - Blume Ventures

Blume Ventures said on Wednesday it has marked the final close of its third fund at $102 million (Rs 715 crore), making it the first homegrown venture capital firm to cross the milestone of $100 million in a single fund.

The early-stage investor, which has backed more than 100 startups including TaxiforSure (acquired by Ola) and Zipdial (bought by Twitter), had made the first close of the fund at $40 million in October 2018 and had set the original target corpus of the fund at $80 million.

The third fund has received the backing of its existing Limited Partners (LPs) and new institutional investors from global markets, Blume said in a statement without disclosing their identities.

Blume said it will continue to focus on opportunities that leverage the mobile-led explosion of the Indian digital-first economy, and Indian engineering and science translated to global market opportunities.

“Sectorally, we've broadened our 'built-in India for global markets' B2B (business-to-business) thesis,” said Sanjay Nath, co-founder and managing partner at Blume.

The venture capital firm has also expanded its early-stage investment team resources to cover enterprise software, drones, robotics, core sciences, and other deep tech areas, he added.

The new fund aims to write an initial cheque of $500,000-$1.25 million with ticket size going up to $3-5 million for winning companies.

The third fund aims to invest in 25-30 startups. It has already made over 10 bets so far including in ed-tech startup Classplus, online aggregator of primary healthcare services HealthAssure, fashion rental, and styling platform Stage3, SaaS-based browser computability testing platform LambdaTest and agri-focussed platform Jai Kisan.

Blume also marked the final close of its Opportunity Fund -- Fund IIA -- at $41 million.

The opportunity fund was raised from both domestic and international LPs, the majority of which are existing investors. The fund is being used to invest in Series B, C, and D rounds of its portfolio companies that are doing well from its previous funds.

The firm had marked the first close of Fund IIA at $22 million in the second half of 2018. It had started investing in its star portfolio companies, since then.

The Fund IIA portfolio consists of Unacademy, Grey Orange, Servify, Turtlemint, Dunzo, Purplle, IntrCity (Railyatri), Milkbasket, Tricog, and Cashify. The investment cycle of the opportunity ends this year.

Blume, founded in 2010 by Karthik Reddy and Sanjay Nath, had closed its debut fund in 2011 at Rs 100 crore (around $20 million then). It closed its second fund, Blume Ventures India Fund II, in October 2016 at $60 million.

In 2018, Blume had elevated Ashish Fafadia, chief financial officer, as a partner. The same year, Blume had also said it has appointed Sajith Pai, previously an associate vice president at BCCL, as director of research and analysis in Delhi.

VC fundraising

In 2019, around a dozen venture capital firms that are focused on backing Indian startups marked the final close of their funds. This was in line with what’s been happening over the last few years, but some significant firms helped buoy the total funds raised to around $2 billion, the highest ever, according to a VCCircle analysis.

Last year, Accel, a marquee investor which has backed leading internet companies like Flipkart and FreshDesk, led the way by raising its largest India fund.

A91 Partners, floated in 2018 by former Sequoia Capital executives and Avataar Venture Partners, floated by former executives at Norwest Venture Partners and Freshworks Inc also marked the final close of their funds last year.

Inventus, 3one4 Capital and India Quotient also raised new funds, as did specialist VC firms Omnivore, DSG Consumer Partners and Alkemi Venture Partners in 2019.

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