Exclusive: Commitments worth $80m in the bag , IvyCap eyes Fund II closure by Apr

Vikram Gupta, founder and managing partner, IvyCap Ventures

After it hit the first close of its second fund in April last year, venture capital firm IvyCap Ventures Advisors Pvt. Ltd said it was poised to close the fund by April.

“We are almost at the verge of closing it. Our target is to close it by March-April this year. It all depends on variable factors, for some institutional investors the legal requirements take time and depending on how fast they close, we should be able announce it,” Vikram Gupta, founder and managing partner, IvyCap Ventures told DEALSTREETASIA in an interview.

The Mumbai-based VC had hit the first close of its second fund at Rs 300 crore ($44 million) with a target of Rs 600 crore ($88 million), and a greenshoe option of another Rs 600 crore.

According to Gupta, IvyCap has got commitments worth Rs 550 crore, of which Rs 450 crore are hard commitments. With a shortfall of only Rs 50 crore, Gupta said he was confident of closing it in the next few weeks.

The company could also see the fund exceeding it targeted amount, with increased interest from foreign investors.

“Technically at Rs 600 crore we can close the fund, we have the option do that, but we will decide in the month of March-April, whether we want to scale up beyond that, because we still have time beyond that. Foreign investors take time with their due diligence and hopefully by that time we should have some kind of interest from them and if that happens, we will have no option but to go up to $200 million as well,” said Gupta.

At the first close of its second fund, the IIT Alumni Trust invested Rs 120 crore ($18 million), while the rest came from institutional investors who had participated in IvyCap Ventures Trust Fund I.

IvyCap had closed its first fund a couple of years ago at Rs 240 crore, from which it invested in companies such as Bluestone.comPurplle.com, and Clovia.

With three investments in FastBobGrabOnRent and FTCash from its second fund already in 2016, IvyCap is looking almost double that number in 2017.

“In terms of number of investments in 2016, we only did 3 fresh investments and we also did some follow on rounds of our first fund. All put together we made 8 investments. From the investment side we have been very cautious, we haven’t take many unnecessary risks,” said Gupta.

“Our strategy for 2017 is going to be to look for companies which are on the growth path and we are seeing a lot of opportunities where the companies have already raised some form of institutional rounds and are finding it hard to raise further capital. We believe that those companies would be interesting to look at,” he added.

As far as cheque sizes go, IvyCap will continue to come in at the Series A or Series B level with cheque sizes of about $4-6 million.

“Typically we don’t want to cut the entire Series B cheque, we would like to lead the round and bring in one or two core investors with us. If we’re putting say $6 million as part of the round then we could actually possibly bring in 1-2 more investors with $2-3 million each,” said Gupta.

With its focus on Series B level investments, IvyCap will adopt a cautious approach for seed-stage deals.

“From a seed stage point of view we will be very selective, also those will be based on the bigger picture view, if we think that we can build much larger companies out of them and do follow rounds also,” said Gupta.

Summing up as to what’s in store for the venture capital fund in 2017, Gupta said the apart from new investments and the closure of its second fund, IvyCap was also scheduled to announce a few exits from its first fund, for which it is already in talks.

According to Gupta, 2017 is also expected to be a good year for venture funds with more foreign investors showing interest in India, its existing portfolio companies are also likely to be at the receiving end of healthy follow on rounds.

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