Anicut logs final close of second fund at Rs 875 crore

The plan was to raise Rs 700 crore, but the firm has also retained Rs 175 crore from oversubscriptions under the green-shoe option. The money has been raised from institutional investors, wealthy individuals and family offices, cofounder and managing partner Ashvin Chadha said.

Anicut’s fundraising signals the continued interest of domestic investors in venture debt firms that invest in the startup ecosystem. Other venture debt funds such as Trifecta Capital, Alteria Capital, Stride and Innoven Capital have also recently raised large pools of capital to back Indian startups.

The firm is likely to launch a Rs 1,500 crore third fund in the middle of 2022, Chadha said.

“We have already deployed around 70% of the capital from the second fund in more than 12 early-stage startups, with an average deal size of Rs 15-100 crore,” Chadha said. “We will fully deploy the capital by the end of the current calendar year,” he added.

Typically, a venture debt fund can recycle its capital two-and-a-half times the fund size, which means Anicut can lend up to Rs 2,000 crore to companies.

Discover the stories of your interest

The firm has returned 14-15% of capital each quarter to its investors from the first fund and, along with the warrants it holds in some of these companies, it is expected to have a return on investment of around 18-20%, Chadha said.

It had raised the Rs 400 crore first fund in 2016. From the first fund, it has backed companies such as Milky Mist, Sugar Cosmetics, Lendingkart, B9 Beverages, Biryani Blues and Shield Healthcare.

“We have not used any placement agency to raise the capital and have seen almost 80% of our new fund being subscribed by Fund I LPs (limited partners) who have doubled down with larger cheque sizes,” he said.

Small Industries Development Bank of India has anchored both funds.

The companies that it has lent to from the second fund include Wow Momos, ASG Eye Care Hospital, Akna Medical (acquired by Pharmeasy), B9 Beverages (Bira), Azure Hospitality, and Wingreens of which BSB and Wingreens have already seen successful exits.

“The company also intends to launch diversified funds in the future, including equity funds, financial institution-based debt products and accelerator programmes in collaboration with premier institutions of the country,” he added.

Last year, Anicut financed Wingreens’ acquisition of Raw Pressery and Akna Medical’s purchase of Vardhaman Health Specialities. “The current pipeline also contains multiple midsize acquisition deals, which we are currently evaluating,” Chadha said.