India: Early-stage VC 8i Ventures to raise $50m for second fund from global institutions

Photo by Josh Appel on Unsplash

8i Ventures, an Indian early-stage VC firm, is in the process of raising $50 million for its second fund to invest in consumer and fintech sectors across the country.

Established in 2018, 8i Ventures had a corpus of $15 million for its first fund of which 40 per cent has been exhausted. Its portfolio companies include Blue Tokai Coffee, and card issuing platform M2P, among others.

“Fund II is launching early next year with largely global institutional LP base,” said Vikram Chachra, founding partner at 8i Ventures. However, he declined to divulge the names of LPs the firm is in talks with.

8i Ventures’ cheque sizes are expected to begin at half a million dollars at seed stage, to Series A and B rounds in startups.

The VC raised the entire corpus of Fund I from HNIs and family offices “who have known us over the years as former colleagues, co-investors and friends,” said Chachra, who has made angel investments in a slew of startups in his personal capacity.

These include automotive Internet portal Carwale, which he has since exited; Healthcare Global Enterprises Ltd (HCG), a provider of cancer care; fintech startup SlicePay; and consumer lending firm MoneyTap.

 “We launched Fund I with the goal of backing founders upgrading how India lives and works. With Fund II, we are adding the context of convenience to the same thesis,” said Vishwanath V, consumer partner at 8i Ventures. “The financial and consumer sectors, today, drive the growth of the Indian economy.”

But, given that the consumer segment is directly linked to the economy, is there a slowdown gripping it in the midst of India’s slowing GDP?

“E-commerce is entering the dawn of a golden era with growth of 35 per cent to 100 per cent across categories over pre-COVID, while the offline retail economy is waiting for recovery. A year from now, we expect more than 5 per cent of the entire retail economy to shift online,” said Vishwanath.

The trend is expected to gather steam as COVID-19 has shifted the digital economy from a nice-to-have to an essential over the past few months.

Chachra added: “India presents a multitude of opportunities so it’s important to understand why it’s important for the founding team to solve a specific problem.”

The participation by the Indian stock market in the digital economy, including the telecommunications sector, is barely 7.5 per cent. What that means is that while 90 per cent of spending has gone digital, 92.5 per cent of assets are still stuck in offline and recovery mode. And the only way to participate in the digital economy is through the venture capital industry in India (unlike the US where FAANG alone is 25 per cent of S&P 500).

Still, Vishwanath sees the trend of digitisation in the economy accelerating the pace of exits. “Founders can actually see themselves on the runway to IPO now,” he said. “Starting 2022, we will see a growing line-up of IPOs from the startup economy and that in itself will forever remove investor anxiety around the lack of exits in India.”

8i Ventures’s fundraising talks come at a time when overall investment sentiments amidst the COVID-19 pandemic market remain tepid.

Data available with research firm Venture Intelligence shows funds raised by investment firms in India recorded a steep 77 per cent year-on-year decline in the first half of this year as LPs tightened their purse strings amidst a hazy outlook for business in the country. Those who have been successful in raising capital include Lightspeed Venture Partners; technology-focused venture capital fund Iron Pillar; and Blue Ashva Capital.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.