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  • South Asia

Iron Pillar adds $45m to debut India fund

  • Suhas Bhat
  • 19 May 2020
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Indian venture capital firm Iron Pillar Capital Management has added $45 million to its maiden fund to support the capital needs of existing portfolio companies.

The GP closed its fund in 2018 with just over $90 million in commitments. LPs include the Overseas Private Investment Corporation (OPIC), financial institutions, sovereign wealth funds, family offices, and technology entrepreneurs. The additional $45 million brings three global institutions and a large European family office into the investor base.

Iron Pillar said the new firepower would go to portfolio companies that are looking to secure capital. 

“We see this as a once in a lifetime opportunity for high-quality tech companies with strong market position, growth and gross margins to solidify their lead with efficient capital spend. One way to achieve this upside is for existing investors to step up with creative structures and provide access to capital for the next 24 months. Our top-up fund is a proactive step in that direction to add fuel to our well-performing portfolio companies,” said Anand Prasanna, a managing director at Iron Pillar.

Iron Pillar supports VC-backed entrepreneurs in India’s enterprise and consumer technology space that have scaled their businesses to achieve positive unit economics and generate meaningful revenue. The firm seeks to lead Series B, C, and D rounds, aiming to fill a gap in the market for later-stage growth capital. Within the consumer space, it seeks to invest in differentiated brands or internet-enabled companies that have demonstrated high margins.

However, Iron Pillar is most active in Indian software-as-a-service start-ups that count a US customer base, often working with Indian founders with a background in US software development that repatriate or employ an Indian workforce. It believes companies with a B2B focus are more capital efficient and will account for a larger proportion of Indian unicorns in the near future.

The firm has made eight investments so far. These include online jeweler BlueStone, customer experience management solutions provider Servify, online fresh food delivery platform Freshtohome, pharmaceutical developer Vyome Therapeutics, and software developer Uniphore. It was hoped that Vyome would list later this year. 

Iron Pillar achieved its first exit towards the end of 2019 when the corporate venture arm of Reliance Industries bought a majority stake in NowFloats, an internet enabler for offline businesses that has since become a part of the Jio Platforms’ initiative. Iron Pillar claims to have secured a 16% return on the investment.

The GP was established by a six-member founding team including Prasanna, formerly of Morgan Creek Capital Management, Mohanjit Jolly, who was previously a partner at Draper Fisher Jurvetson, and ex-Citigroup banker Sameer Nath. 

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