Blume hits $105m first close on fourth India VC fund

The overall target for Fund IV is $200 million. The firm said in a statement that it hopes to reach a final close by March of next year. LPs include institutions, family offices, and entrepreneurs from overseas as well as a domestic cohort comprising wealth management platforms, family offices, and entrepreneurs.

It continues a hot streak in India venture capital fundraising, with more than $2.2 billion committed to local managers. This represents the largest share of $6.4 billion raised for all India private equity strategies year-to-date, already exceeding the 12-month total of $5.6 billion for 2020.

Earlier this week, WaterBridge Ventures closed its second fund at $250 million. This follows a $550 million fundraise for A91 Partners, which focuses on mid-stage technology-enabled businesses. Other notable final closes include Stellaris Venture Partners raising $225 million for its second fund and Sequoia securing $195 million for its second India seed vehicle.

Blume closed its third fund in 2020 with $105 million in commitments, beating the target of $80 million. That came four years after raising $60 million for Fund II.

The mandate remains unchanged. Blume will focus on pre-seed and pre-Series A rounds, although the larger fund size is expected to allow it to remain invested in start-ups across more rounds. Initial equity checks will be in the $1-2.5 million range, compared to $500,000 to $1.25 million for the previous fund, reflecting the rise in valuation expectations.

"There is no precedent for the current environment. We have to be sensible but not conservative, which is also what we are telling our founders. We are trying to be thoughtful about it," Karthik Reddy, a managing partner at Blume, told Moneycontrol. He added that start-ups need capital to recruit and retain talent, accelerate growth plans, and enter new markets.

Reddy and Sanjay Nath established Blume in 2010, having met through seed-stage outfit Mumbai Angels. Both saw an opportunity to bridge the gap between angels and larger institutional investors in India. They wanted to create a firm that moved as fast as an angel investor but was institutionalized in its approach.

The Blume portfolio includes the likes of used-care marketplace Spinny, insurance technology platform Turtlemint, robotics specialist GreyOrange, beauty e-commerce player Purplle, and education businesses Classplus and Unacademy. All apart from GreyOrange have closed Series C rounds or later since the start of the year.

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