It is aiming to make the final close of the fund by December.
Chiratae chairman and founder Sudhir Sethi told ET that he expects the final fund size to be oversubscribed, by about 30-50%.
“We have a large portfolio and our companies raised $1 billion last year, and almost $1 billion this year. We have three companies which are reaching a revenue of $1 billion each and several reaching the $50 million to $750 million mark. So, when they raised capital, we realized that we needed a growth fund to back them,” Sethi said in a face-to-face interaction.
Chiratae will evaluate a base of its top 16-20 high-performing portfolio companies to invest through the new growth fund.
“This is also an investment opportunity for our existing and new limited partners which are coming in. So, since we knew the quality of our companies, we said let’s raise a growth fund,” Sethi said on the rationale behind raising a separate growth fund.
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A predominant part of the corpus from Chiratae Growth Fund 1 will go into its existing portfolio companies, Sethi said.
“Our own portfolio consumption is heavy right now, and we will invest the surplus that is left over after deploying the capital in our portfolio, into newer companies. But new companies will be fewer. We will be co-lead or followers in these growth-stage rounds. This is because the cheque sizes for us go up to $15 million to $20 million and a little bit upwards for Series C and D rounds,” said Sethi.
Chiratae’s first growth fund has come after it announced the close of its fourth (Fund IV) and largest venture capital fund worth $337 million in August 2021. It has deployed most of that capital and is in the process of raising its fifth fund (Fund V). starting next year.
Like its previous funds, Chiratae’s new growth fund is expected to be a 50% mix of global capital, with the other half raised from rupee capital, or domestic investors.
In the past, Chiratae Ventures has raised five early-stage funds and has $1.1 billion in assets under management (AUM).
Chiratae Ventures India Advisors, formerly IDG Ventures India, which was launched in 2006, has largely played on the themes of ecommerce, marketplaces, vertical commerce, software-as-a-service, agritech and fintech and invested in the likes of FirstCry, Flipkart, Globalbees, Lenskart, PolicyBazaar and Fibe (formerly EarlySalary). It has been actively focusing on horizontal plays such as deeptech with its fourth fund and will also look to back opportunities in the climate-tech space.
The venture capital firm said it had delivered over 45 exits and witnessed three initial public offerings (IPOs) from its portfolio including the likes of PolicyBazaar, Newgen Software and Yatra Online. It has more than 128 investee companies in its portfolio presently.
The venture fund is expected to deploy the total corpus of its first growth fund over the next two-and-a-half years.
“This is one of the fastest fundraises that we have seen. Thanks to our investors, we are oversubscribed and are looking to close this by the end of the year. We are excited about investing in companies that solve population-scale problems,” said TC Meenakshi Sundaram, founder and vice-chairman of Chiratae Ventures.
Even as the investors continue to be cautious about new investments owing to the global macroeconomic sentiment, several venture capital firms have raised their largest corpus till date, focused on the region.
Recently, Accel – which has backed ecommerce firm Flipkart and SaaS firm Freshworks – raised $650 million to focus on early-stage investments.
Elevation Capital, which has actively backed startups including fintech firm Paytm and food delivery app Swiggy, raised $670 million, its largest India-dedicated fund to back startups in the region.
In June, Sequoia Capital raised $2.85 billion to deploy across startups in India and Southeast Asia, the largest dedicated corpus for the region by a risk investor.
“I am glad that Chiratae, as the largest home-grown venture growth firm, has achieved its fastest fund closure of Chiratae Growth Fund 1, on the back of a decade-plus long history of stellar returns, high governance, firm institutionalization, backing Unicorns with capital from Indian as well as global investors repeatedly,” said Kris Gopalakrishnan, member, global advisory board, Chiratae Ventures, and cofounder of Infosys.
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