Inventus Capital closes second fund at $106M

India-focused early-stage investment firm Inventus Capital Partners has officially announced completing fundraising process of its second fund at $106 million. The new fund, which was originally targeting $100 million, will invest in 20-25 companies operating in the digital services sector, particularly in consumer & business software and technology-enabled services.

Last month, VCCircle had first reported the company has seen oversubscription for its second fund, which is around twice the size of its maiden fund which raised a little over $50 million during 2007-09 from a group of over five dozen investors. Inventus had started fundraising for its second fund in November 2011.

Inventus has already invested in a few firms from its new fund, including Unbxd (a product recommendation platform for e-commerce companies), Espresso Logic (a database backend services provider for mobile and web developers), PolicyBazaar (online insurance policy aggregator) and eDreams (a startup focused on the education industry).

According to the firm, while products have dominated past waves of technology evolution, the industry is in the midst of a transformation from product to service-led businesses.

Inventus is joining a slew of VC firms who have raised early-stage investment funds focused on India. Over the last two-three years, Nexus Venture Partners, a technology-focused fund house, raised $270 million for its third fund while Helion Venture Partners, an early-to-mid-stage venture capital firm, secured around $255 million for its third fund. Kalaari Capital (formerly IndoUS Venture Partners), too, closed its $150 million fund. Other firms which have raised early-stage funds include Accel Partners, Kae Capital and India Quotient.

Inventus typically leads the first venture round with $1-2 million in funding, and prefers to lead a company’s first institutional round with up to $10 million. Inventus has a particular interest in digital services businesses, particularly business software, internet marketplaces, mobile apps, and technology-enabled services addressing a wide variety of consumer and business-oriented industries.

Its portfolio companies are spread across verticals such as IT/ITeS, healthcare education, mobile, etc., and the VC firm has, so far, invested in around 24 companies, with three successful exits under its belt.

Its past and present portfolio includes redBus (which was sold to Naspers), eTechies, Savaari, Sokrati, TELiBrahma, Cbazaar, ViVu (acquired by Polycom), Insta Health, Sierra Atlantic (snapped by Hitachi Consulting) and Funds India.

(Edited by Joby Puthuparampil Johnson)

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