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Tech-focussed 3one4 Capital marks first close of opportunities fund
Photo Credit: VCCircle

Early-stage venture capital firm 3one4 Capital on Wednesday announced the first close of its dedicated opportunities fund that will seek to invest in select portfolio firms that are raising funding from the Series B stage onwards.

The dedicated opportunities fund -- Continuum I -- is targeting a total corpus Rs 350 crore ($50 million) and has hit the first close at Rs 150 crore ($21 million), 3one4 Capital said in a statement.

The firm said that the fund has received commitments from several of the larger Limited Partners (LPs) and investors from its previous funds as well as new LPs.

3one4 Capital had marked the final close of its second fund last year at Rs 250 crore ($39 million), exceeding its target corpus after exercising the overallotment option.

Institutions, corporations, family offices, fund managers and individuals had committed capital to that vehicle.

The new LPs in the opportunities fund include top-tier university endowments in the US and Japanese conglomerate Sojitz Corporation, which is also planning to open a new office in India by April this year.

These new LPs will also explore co-investment opportunities in rounds raised by the portfolio companies, 3one4 Capital added. 

Continuum I’s typical ticket size will range between $3 million and $5 million.

With the final close of this new fund and other initiatives in the pipeline, 3one4 Capital will manage a combined corpus of more than Rs 750 crore ($100 million), the venture capital firm said.

Established in 2015, 3one4 Capital is managed by Pranav Pai and Siddarth Pai, sons of TV Mohandas Pai, a former finance chief at software services firm Infosys Ltd and an active angel investor.

It had launched its first fund in early 2016 and raised Rs 100 crore (about $15 million).

3one4 Capital invests in machine intelligence services for enterprises, automation, ambient intelligence technologies, ed-tech, fin-tech, media and content development, and health. It also allocates a portion of its capital to US-focussed companies with an India play.

3one4’s portfolio includes human resources startup Darwinbox; online meat and fish ordering startup Licious; biotech firm Bugworks; ed-tech startups Magic Crate and Oust Labs; fintech startups Faircent.com and SwitchMe Technologies; farm-tech firm Aibono; digital media company Yourstory Media; and data analytics firm Tracxn.

Last month, it bet on Mumbai-based LoanTap Financial Technologies Pvt. Ltd, a digital platform that offers loans and overdraft products to salaried professionals.

Opportunities funds 

In the past, a few other VC firms have also raised opportunities funds before launching new full-fledged vehicles.

In April 2016, Matrix Partners India raised an "interim fund" of $110 million (Rs 730 crore) to make new investments in early-stage tech startups.

Matrix Partners India subsequently launched its third fund and said last month that it had closed fundraising at $300 million.

In December 2016, venture capital firm Lightbox had raised an 'expansion fund' of $54 million to invest more in existing portfolio companies.

Last year, Lightbox raised the bulk of its third fund after expanding its total corpus to $200 million.

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