Venture capital firm Matrix Partners India, which has backed unicorns like Ola and Dailyhunt, has kicked off the process to raise a larger new fund amid funding crunch in the startup ecosystem.
Matrix Partners India aims to raise $450 million for its fourth fund - Matrix Partners India IV, LP, according a disclosure with the US Securities and Exchange Commission (SEC).
The venture capital firm Matrix Partners India had raised $300 million for its third vehicle in 2019.
An email sent to Avnish Bajaj, founder and managing partner, Matrix Partners India, seeking details on the potential Limited Partners (LPs) in the fund and the new fund's investment strategy did not elicit a response.
Matrix Partners India's launch of the new fund comes amid fears of a deepening funding winter in the ecosystem due to volatile global cues and mass startup layoffs seen in recent weeks even as a section of the startups continues to get funding and unicorns continue to erupt albeit at a moderate pace compared to last year.
Just in April this year, Matrix Partners India's portfolio firm Dailyhunt's parent VerSe Innovation Pvt. Ltd raised a massive $805 million at a valuation of $5 billion led by CPP Investments.
Matrix Partners India is not alone in launching a larger fund or raising a bigger fund in a bear market this year. Just last week, its larger peer, Sequoia Capital raised $2.85 billion across a set of funds to continue financing entrepreneurs to invest in Southeast Asia and India. In March, Accel India, an early backer of startups such as Flipkart and Freshworks, raised $650 million for its seventh fund. The following month, Elevation Capital (formerly SAIF Partners) raised $670 million for its fifth India-focused vehicle.
Incorporated in 2006, Matrix Partners India has over the years changed from a quasi-private-equity investor to a conventional venture capital firm with a focus on tech startups.
The venture capital firm, which was started by Bajaj and Rishi Navani, had launched its first fund with a corpus of $150 million and later topped it up to $300 million. Subsequently, it raised $300 million for its second fund in 2011.
Five years later, when talks of floating a new fund were doing the rounds, Matrix Partners announced the extension of the second fund by $110 million in 2016.
The same year, Navani quit Matrix Partners to float a new investment firm named Epiq Capital.
Other managing directors in Matrix Partners India are Tarun Davda and Vikram Vaidyanathan.
Matrix Partners India has been one of the most active venture capital firms in India over the year. Last year, it made 29 investments of which 10 were new bets, according to a VCCircle analysis. In comparison, Accel made 39 investments of which 19 were new deals and Elevation Capital made 35 investments of which 24 were fresh bets
According to its website, Matrix Partners India has over 60 current investments. Its other major investments include Ola’s electric mobility arm Ola Electric Mobility, social commerce startup DealShare, neobanking startup Jupiter, healthtech platform Practo, and student accommodation startup Stanza Living.
Last week, the venture capital firm led a Series A funding in Mumbai-based direct-to-consumer (D2C) skincare brand Foxtale.