Pune-based Windrose Capital said it has marked the initial close of its debut fund that seeks to invest up to $30 million (Rs 213 crore) in early-stage startups in India.
The Next Billion Fund is a Category I alternative investment fund registered with the Securities and Exchange Board of India, Windrose said in a statement.
Category I comprises social venture funds, small and medium-sized enterprises funds, infrastructure funds, venture capital funds and angel funds.
Rohit Goyal, managing director at Windrose Capital, told VCCircle the fund got its licence from SEBI in February 2017 but decided to launch it only this year. The final close of the fund is likely by the end of the year, he added.
Goyal said Limited Partners (LPs) in the fund include a group of investors with entrepreneurial backgrounds in different segments. Windrose Capital has brought in about 10% of the target corpus.
Super-rich individuals, family offices and domestic institutions are also likely to contribute to the fund, he said.
Windrose Capital, which was founded in 2014, has been investing in digital-first early- to mid-stage startups. Previously, it made over a dozen other investments through its proprietary and private multi-family corpus. Its earlier investments include Idea Forge, Nivesh.com, Favcy and Precily.
The Next Billion Fund has made three investments – Biddano, which is addressing the problem of fragmented logistics of the healthcare industry using tech-driven models; and Paper.VC, a data services startup. Its third transaction was a follow-on capital infusion in Nivesh.com, which is a mutual fund investment platform.
The fund is in advanced talks with more than a dozen companies for investments that are likely to happen before the end of this year. It is looking to invest in about 40-45 companies over the next two years, said Goyal.
The fund is sector-agnostic but is particularly interested in themes such as financial inclusion (fintech, non-fintech, assurance); e-efficient value delivery chains (smart mobility, logistics, electric mobility, Internet of Things and physical networks); and business enablement (artificial intelligence, machine learning and smarter process automation).
The launch of the seed and the early-stage fund is good news for startups in India as deal volume has fallen from the boom year of 2015 even though a bunch of new domestic early-stage VC firms have emerged. Still, investors argue that 2015 was a one-off year and they have become more selective in their investments now.
Last week, the Indian Angel Network marked the final close of its maiden fund, IAN Fund, at Rs 375 crore ($53 million), surpassing the target corpus by Rs 25 crore.
Domestic early-stage VC firms that are on the road to raise new funds include Blume Ventures, Endiya Partners and India Quotient.
*This article has been updated to add comments from Windrose managing director Rohit Goyal.