Stellaris closes second India VC fund on $225m

The venture capital firm, which was founded in 2017 by Ritesh Banglani, Alok Goyal, and Rahul Chowdhri, who previously worked together at Helion Venture Partners, raised $90 million for its debut fund. The International Finance Corporation (IFC) contributed $10 million to Fund I and the development finance institution has re-upped in Fund II, increasing its commitment to $25 million.

Other LPs in the first vehicle include Small Industries Development Bank of India (SIDBI), IT services giant Infosys, and approximately 50 Indian entrepreneurs, executives, and fund managers, such as Taxiforsure co-founder Aprameya R. and Kanwaljit Singh, a Helion co-founder who went on to establish Fireside Ventures. About half the corpus comprised rupee capital.

Local entrepreneurs continue to be represented in Fund II but the US dollar-denominated share has risen to 75%, with global LPs accounting for 80% of overall commitments, according to a report by The Economic Times referenced in a Stellaris LinkedIn post.

Stellaris has made 19 investments from Fund I, backing the likes of software-as-a-service (SaaS) player Whatfix, risk and compliance specialist Signzy, digital healthcare start-up mFine, B2B cashflow management app CredFlow, and personal care brand Mama Earth. Fund II is targeting 25 portfolio companies across healthcare, education, financial services, logistics, consumer internet, and SaaS.

"We needed this size to make larger upfront investments, to back our conviction with dollars. It also allows us to support founders for longer. Now, if we enter at the seed stage, we can back companies for four funding rounds and that requires capital," Banglani told The Economic Times.

"It helps the entrepreneur as they have the support to go on and execute for the next 18 months, while also protecting our ownership in good companies for an extended period of time."

The Stellaris sweet spot has traditionally been seed and Series A rounds of around $10 million. This remains the case for Fund II, but deal sizes are rising – albeit not as rapidly as in the later stages.

VC investors have previously told AVCJ that Series A rounds for in-demand start-ups have risen from $10 million to $20 million, with an increase of similar magnitude happening at the Series B stage. This is blamed in part on later-stage investors pushing into earlier rounds in search of value.

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• Topics
• South Asia
• Fundraising
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• India
• Stellaris Venture Partners
• Helion Ventures
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