Iron Pillar marks final close of debut mid-stage tech VC fund
Photo Credit: Shah Junaid/VCCircle

Venture capital firm Iron Pillar, which provides growth capital to mid-stage tech companies in India, has marked the final close of its maiden fund at $90 million (Rs 666 crore at current exchange rates), founder Anand Prasanna told VCCircle.

The fund was targeting a total corpus of $100 million and was looking at a hard cap of $150 million.

“We settled for $90 million because we did not want to spend more time on fundraising but wanted to focus on investments and the companies we have invested in,” said Prasanna. “One fewer deal will not hurt us.”

Limited Partners (LPs), or investors, in the fund include a diversified group of institutions, sovereign wealth funds, family offices and technology entrepreneurs from the US, Europe, West Asia, Singapore, China and India, Iron Pillar said in a separate statement.

Domestic LPs include Small Industries Development Bank of India (SIDBI) and diversified financial services company IIFL, and some entrepreneurs and tech executives, said Prasanna. They account for 25% of the fund. The remaining came from global LPs, he added.

As first reported by VCCircle, Iron Pillar was floated in 2015 by Anand Prasanna, who quit as head of Asia for international investment advisory firm Morgan Creek to start the firm.

Iron Pillar’s founding team has five more people apart from Prasanna: Sameer Nath, Mohanjit Jolly, Harish Hulyalkar, Ashok Ananthakrishnan and Ashish Shah.

In 2016, VCCircle reported that the firm was likely to make the first close in the region of around $40-50 million. In May last year, The Economic Times reported that the fund had made the first close at Rs 129 crore.

The fund will focus on venture investments at the Series B, C and D rounds of funding. It has already made three investments.

“The lack of specialist venture growth funds has been frequently cited by VCs and entrepreneurs as a challenge, as the Indian market matures,” Iron Pillar said in its statement, explaining its focus on the mid-stage and late-stage levels of funding.

Other investment firms that focus on mid-stage funding in India include Sistema Asia Fund and Bertelsmann India Investments. Big VC firms such as Sequoia Capital, Accel Partners and SAIF Partners also invest at these stages.

Iron Pillar’s most recent investment was in Servify, a startup that offers brand-authorised after-sales service for devices. It has also invested in Hyderabad-based small and medium enterprise-focussed software-as-a-service startup NowFloats Technologies and online jewellery platform Bluestone.com.

The fund aims to do six more deals and stagger it by doing three to four deals a year, said Prasanna.

Venture capital fundraising

A number of large and small VC firms have achieved fundraising milestones this year.

Earlier this week, homegrown early-stage venture capital firm Blume Ventures marked the first close of its third fund at $40 million.

Last month, Lightbox said it had raised a bulk of its third fund after expanding its total corpus to $200 million (Rs 1,448 crore).

Pi Ventures closed fundraising for its debut investment vehicle at Rs 225 crore ($31 million) in September.

In August, Sequoia Capital India closed its sixth fund at $695 million.

Matrix Partners raised $300 million (Rs 2,100 crore) for its third India-dedicated fund.

Saama Capital and Lightspeed India Partners have also closed new funds this year while Nexus Venture Partners said in June it had raised 70% of the targeted $450 million for its new fund.

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