Early-stage venture capital firm Prime Venture Partners, which has backed the likes of MyGate and Mfine, on Wednesday raised $75 million (or Rs 556 crore) towards the first close of its fourth fund at Prime Venture Partner’s fourth fund is its largest till date, pegged at a total corpus of $100 million. Established institutional investors including the International Finance Corporation (IFC), part of the World Bank Group, have joined as limited partners (LPs).
IFC’s contribution to Prime’s Fund IV stands at $15 million, which has also seen participation from a large endowment fund, the venture capital firm told Mint.
Prime had closed its first fund worth $8 million in 2012, its second fund worth $46 million in 2016 and closed its recent Fund III in 2018 worth $72 million.
With Fund IV, Prime expects to continue to make four to six investments a year and looks to exhaust the new fund over the course of the next three years. Overall, it looks to back between 16-20 companies with the new fund.
The venture investor has largely backed startups with solid digitisation themes of fintech and healthtech. It will now look to diversify its investment across new segments of decentralised technologies such as blockchain, electric vehicle, crypto as well as gaming and entertainment. It will continue to back larger software plays in India, which are focused on international customers.
“IFC has a strong development focus, and most companies we have backed in the past have a strong development philosophy whether we talk about NiYO bringing neo-banking to blue-collar workers or MyGate, for instance. They (IFC) also bring a lot of best practices from across the world and credibility to the work we have done so far [...] IFC does invest alongside partners especially in India, and it's a reasonable possibility for them to participate in some of our rounds,” said Sanjay Swamy, managing partner at Prime Venture Partners.
Swamy added that the VC is expected to exhaust its Fund III in the next 18 months, as it looks to participate in follow-on rounds of its portfolio.
Till date, Prime has backed close to 32 companies across three funds; and will continue to bet on companies from seed to Series A stage.
Prime has been the first investor in startups such as invoice discounting platform, KredX; interactive learning platform, Quizizz, which have gone to raise follow-on rounds from the likes of Tiger Global and Sequoia Capital India.
Over the past months, several Indian venture capital firms have closed their new funds. Chiratae Ventures (formerly known as IDG Ventures) made its final close for its fourth and largest fund at $337 million, earlier this month. Shortly after, even Stellaris Venture Partners closed its second fund at $225 million, this month.
“The market has a lot more players on the VC side and that is dwarfed in front of the opportunities and high-quality entrepreneurs which the ecosystem is seeing. At Prime, we feel that it is good that there is more money which will motivate more entrepreneurs to come in. Certainly, valuations have moved up, but our ability to support founders and work closely with them continues to keep us differentiated,” stated Swamy.
Eight-year-old Prime Venture Partners is now looking to add a fourth partner to its fund, as it looks to formally expand its partnership and add more operational experience to the team.