<article>After shelving its plans of raising a venture capital fund three years ago, Mumbai-based investment firm <a style="color: #000080;" href="http://dealstreetasia.com/tag/zone-startups" target="_blank" rel="noopener noreferrer">Zone Startups India</a> Fund has hit the road again to mop up a $30-million tech-focused vehicle.</article>

After shelving its plans of raising a venture capital fund three years ago, Mumbai-based investment firm <a style="color: #000080;" href="http://dealstreetasia.com/tag/zone-startups" target="_blank" rel="noopener noreferrer">Zone Startups India</a> Fund has hit the road again to mop up a $30-million tech-focused vehicle.
In 2014, Zone Startups India Fund &#8211; a joint venture between Canada&#8217;s Ryerson Futures Inc and India&#8217;s Chokhani Group &#8211; planned to raise a $15 million fund.
However, Zone Startups shelved its plans at that time and set up an accelerator, which has backed startups such as CitrusPay, Baby Chakra and Flexi Loans.
&#8220;We were going to launch the fund in 2014 but we were not satisfied with the market conditions at that time. So, we gave it some time for the market to get established, till then we were taking soft feelers from investors. Now we are fund raising and have a good track record to show investors,&#8221; Krishna Chokhani, Managing Partner at Zone Startup India Fund, told DEALSTREETASIA in an interview.
The company has already got a soft commitment worth $3.5 million and sponsor commitments worth $2 million, and hopes to achieve the first close at $8-9 million in the next three to four months. It plans to reach a final close of the fund by the end of 2018.
The fund is likely to be backed mainly by domestic investors, as foreign investors are keen on a local investor before they put in money, reasons Chokhani.
The fund has already identified a pipeline of 8-10 promising deals off the 120 that Zone Startups India (Accelerator Programme) is working with, and will start deployment once it achieves the first close.
&#8220;We have made only warehouse investments at the moment. We have invested into one and are conducting due diligence in three more,&#8221; said Chokhani.
&#8220;Fund would invest in startups that are a part of the accelerator programme for at least three months or more. The accelerator programme would act as a working due diligence for the fund and would help with  insights which cannot be presented in a Pitch deck,&#8221; he added.
It plans to invest $50,000-$500,000 per startup, which may go up to $1 million in some cases, across 25-30 companies from the first fund.
&#8220;We would not like to allocate more than 5-7% of the fund size to one company to maintain diversification in investments,&#8221; Chokhani said.
&#8220;Small ticket sizes and the working due diligence with a strong pipeline of deals from the accelerator would reduce the Risk on Investment by a big margin. A strategy all funds are looking to adopt,&#8221; he added.
Venture capital firms have been gathering dry powder even though the deployment is slow this year. While <a style="color: #000080;" href="http://dealstreetasia.com/tag/saif-partners" target="_blank" rel="noopener noreferrer">SAIF Partners</a> is on road to raise a $350 million new fund, Mumbai-based mid-stage investor <a style="color: #000080;" href="http://dealstreetasia.com/tag/iron-pillar" target="_blank" rel="noopener noreferrer">Iron Pillar Capital Management Ltd</a> has also set a target of $150 million for its new venture capital fund.
Earlier this year, tech-focused venture capital firm <a style="color: #000080;" href="http://dealstreetasia.com/tag/stellaris" target="_blank" rel="noopener noreferrer">Stellaris Venture Partners</a> marked the first close of its $100 million fund at $50 million in January.
<a style="color: #000080;" href="http://dealstreetasia.com/tag/idg-ventures" target="_blank" rel="noopener noreferrer">IDG Ventures India </a>also closed its latest fund at $200 million. <a style="color: #000080;" href="http://dealstreetasia.com/tag/indian-angel-network" target="_blank" rel="noopener noreferrer">Indian Angel Network</a>, one of the largest angel networks in Asia, 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<a style="color: #000080;" href="http://dealstreetasia.com/tag/pi-ventures" target="_blank" rel="noopener noreferrer"> pi Ventures</a>  announced the first close of its $30 million fund at $13 million.
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After dropping its plans for a venture capital fund 3 years ago, investment firm Zone Startups India has hit the road again to raise a $30 million fund.

Exclusive: Zone Startups India Fund floats $30m vehicle, eyes first close by Dec

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Exclusive: Zone Startups India Fund floats $30m vehicle, eyes first close by Dec

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