Homegrown venture capital firm Blume Ventures has closed its third fund, dubbed Blume Ventures Fund III, at $102 million, taking the firm’s total capital under management to about $220 million.
The final close of the fund, which the firm started raising in late 2018, was completed in December last year. The first close, at $45 million, was completed in October 2018.
With the larger corpus, Mumbai-based Blume aims to own larger stakes and stay invested longer in investee companies that it identifies as breakout businesses within the portfolio.
The new fund will also see the firm increase its entry cheque size to anywhere between $500,000 and $1.25 million. Follow-on investments in ‘breakout’ companies could go up to $5 million, the firm said in a statement.
The fund aims to build a portfolio of 25-30 companies in mobile-led, digital-first economy opportunities in India, and in Indian engineering and science startups looking to tap global market opportunities, the statement said.
Limited partners (LPs) in the fund are a mix of Blume’s investors from its earlier funds and new institutional investors from global markets. The firm didn’t disclose the names of any of its LPs.
“Our existing backers have reposed continued faith in our ability to back, nurture and build sustainable and exciting businesses. Their support has brought us this far and inspired a new set of world-class institutional investors who have partnered with us in 2019, to help us build the next decade at Blume,” Karthik Reddy, co-founder and managing partner at Blume Ventures, said.
Fund III has already made over 10 investments. Investments in domestic market opportunities include HealthAssure, Stage3, Jai Kisan, TartanSense, Procol, Classplus, Tapchief and LeverageEdu. The sectors span healthcare, agritech and ed-tech among others. The fund has also made a slew of deep-tech and global market technology bets such as AgaraLabs, Lambda Test, Ethereal Machines and Euler Motors.
Some of Blume’s notable bets from the previous two funds include Unacademy, Grey Orange, Spinny, Turtlemint, Dunzo, Purplle, and Railyatri (IntrCity).
“Sectorally, we’ve broadened our ‘built in India for global markets’ business-to-business (B2B) thesis. Thanks to a rise in the quality and availability of talent in leading edge technologies like artificial intelligence (AI)/ machine learning (ML), we've expanded our investment team resources to cover enterprise software/software-as-a-service (SaaS) as well as space/drones, robotics, core sciences and other deep-tech areas,” Sanjay Nath, co-founder and managing partner, said.
Nath and Reddy founded Blume in 2010 and closed the firm’s debut fund in 2011 at Rs 100 crore (around $20 million then). In October 2016, it marked the final close of its second fund, Blume Ventures India Fund II, at $60 million.
Ashish Fafadia, who has worked at Blume since 2012, was added to the partnership in Fund III.
Besides building a strong portfolio of over 100 startups with these three funds, Blume also offers its portfolio companies allied services such as hiring, fundraising, business development, founder learning and development. Its offerings include Constellation Blu for financial and legal assistance, Passion Connect for talent acquisition, Arka Venture Labs for B2B cross-border accelerator joint ventures with US-based funds, and Blu Swan for internal growth capital advisory. The firm has also set up a research and development investment programme BUDHA with Japanese strategic partner UTEC, to back deep/hard technology ideas.
With the new fund, the Mumbai-based company has expanded its physical presence to New Delhi and Bengaluru over the past 18 months and scaled its teams in these cities.