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Start-up incubator Venture Catalysts targets $100 mn for fintech fund

By Anuj Suvarna

  • 27 Jan 2022
Start-up incubator Venture Catalysts targets $100 mn for fintech fund
Credit: 123RF.com

Start-up incubator Venture Catalysts said on Thursday that it is launching a fintech fund called Beams FinTech to invest in growth-stage fintech companies.

It is aiming to raise $100 million (around Rs 748 crore) though the fund which will also have a greenshoe provision, if there is investor interest.  It will back fintech firms with a cheque size of $8 to $10 million in Series B and C growth stages, Venture Catalysts said, in a statement.

Several banks, non-banking financial companies (NBFCs), other fintechs, fintech founders, family offices and ultra-high net worth individuals are in advanced stages of their first close, the statement said.   First close is a milestone at which the fund begins investing. 

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"Fintech is consuming an increasingly larger slice of the software pie. We are in fintech 3.0 right now in India, with the first wave of lending and payments companies having received a significant amount of capital and now the capital is moving across segments. Seasoned professionals and high-quality founders are moving out from larger firms to target newer categories to solve the long tail financial services demand in India," Sagar Agarvwal, co-founder and Partner of Beams FinTech, said.

"We estimate that the maximum number of unicorns in India will be from the Fintech space over the next decade," he added.

VCCircle exclusively reported on the development in November.

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"We expect nearly $200 bn of new value creation by existing and new fintechs in India over the next 5-7 years. Beams will primarily focus on segments such as embedded finance, enterprise SaaS products, neo banks and platforms catering to MSMEs," Apoorva Sharma, co-founder and investment committee member, Beams, said 

Beams is launched by Sagar Agarvwal, Apoorva Ranjan Sharma, Anuj Golecha, Anil Jain and Gaurav Jain. The founding team of Beams has previously invested in companies such as BharatPe, Dukaan, Flobiz, Esskay, Impact Guru, Suryoday, Klub, GetVantage, and LenDenClub, the firm said.     

The fund also has roped in chairman of the Fintech Convergence Council and founder of ItzCash (now EbixInc) Naveen Surya as part of the core founding team.   

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  Venture Catalysts was set up in 2015 by Sharma, Golecha, Anil Jain, and Gaurav Jain. The Mumbai-based venture capital firm typically invests $250,000 to $2 million in seed and pre-series A rounds, besides raising seed-stage and Series A investments for startups.   

Venture Catalysts Group has incubated and led investments in over 117 startups to date, according to its website. 

With the growth in the fintech space, others have also come up with their own fintech funds.  IIFL Fintech launched a Rs 100 crore fintech fund last August to invest in fintech startups. Earlier this week, Pine Labs chief executive Amrish Rau and Jupiter cofounder Jitendra Gupta launched a $40 million fintech fund. In October 2021, homegrown private equity firm True North also said it will focus on making digital first and fintech firms.   

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The space has also produced over a dozen unicorns including the likes of  BharatPe, Digit, Cred, Meesho, Groww, Five Star Finance, Zeta, and Chargebee.

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