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Watch: Agritech, edtech, deep-tech to be breakout sectors for Fund III: Sajith Pai, Blume Ventures

19 Dec, 2019

As it nears the final close of its third successive fund, Mumbai-based venture capital firm Blume Ventures is betting on agritech, edtech and deep-tech to be breakout sectors led by high adoption of smartphones and easy availability of data. The firm is also open to co-investing with strategic players including super angels from the new fund.

The firm, which backs technology-enabled startups, announced the first close of its $80-$100 million Fund III in October last year. It will make 25 to 30 investments from the fund, with cheque sizes at between $700,000 and $1 million, Sajith Pai, director at Blume Ventures, told TechCircle on the sidelines of the recently concluded TechCircleLIVE summit in Delhi. 

The firm recently saw an exit with Reliance Industries acquiring a controlling stake in small and medium enterprise focus SaaS platform NowFloats. Reliance acquired an 85% stake in NowFloats for $20 million.

Pai added that founders need to have realistic valuation goals and were becoming increasingly choosy on who joined their cap tables. “We typically back around seven companies with follow-on cheques. While we are open to co-investing, we are also seeing companies bringing super angels on board,” he said.

With a large number of early stage venture capital firms raising new funds, Pai says that there is a shift towards sector specific funds which can play a strategic role for the company. While the firm has been encouraging its portfolio companies to build with a public listing mindset, there is still time for India’s public markets to grow in depth.

“From every fund, there are three to four big exits. Small buyouts do not necessarily move the needle for us,” said Pai. 

The firm has already started deploying Fund III, including its recent investment in professional networking and consulting platform TapChief and fashion rental company Stage3