Early stage-investor India Quotient is looking to invest seed capital in around 25 startups through its new fund, which is targeted to reach its first close by October.
The target corpus for the new fund, which will be the Mumbai-based investors’ third vehicle, is around $50 million going to $80 million with a greenshoe option, Prerna Bhutani, Partner, India Quotient, said in an interaction.
“The fund will invest in 25 startups in seed rounds of $300,000-500,000 and follow on in the subsequent rounds. The fund would target a ownership of around 20 per cent in each investment,” she said.
The third fund will also make small investments of under $100,000 via its IQ snipers accelerator program, which was launched last year.
The new vehicle has started collecting commitments and a large part of the first close commitments from its existing LPs, mostly comprising of leading entrepreneurs of India. SIDBI was an investor in the first 2 funds and is expected to be a large investor in the current fund also, said Bhutani.
It is also looking to raise a part of the funds from overseas investors.
Founded in 2012, India Quotient has raised two funds so far, the last of which was closed at $16 million that was mostly raised from HNIs. Its portfolio includes around 30 startups such as ShareChat, LendingKart, HolaChef, Roposo and PrettySecrets.
Founders Anand Lunia and Madhukar Sinha will be the general partners, while Bhutani, Gagan Goyal, the latest addition to India Quotient, will form the investment team.
“It would invest across sectors with a focus on fintech, social media, online brands and niche marketplaces. The fund would also invest in smart devices in healthcare and edutainment,” said Bhutani.
Even as the number of early-stage deals has declined in the first half of 2017, the dry powder for investment is piling up. Earlier this year, tech-focused venture capital firm Stellaris Venture Partners marked the first close of their $100 million fund at $50 million in January.
Indian Angel Network, one of the largest angel networks in Asia, also recently marked the first close of its maiden fund at Rs 175 crore ($27.3 million). The fund has a target of Rs 350 crore ($55 million). Another early-stage investor pi Ventures also announced the first close of its $30 million fund at $13 million.