Elevation raises $670m for latest India VC fund
India-focused Elevation Capital has closed its latest early-stage fund on USD 670m on the back of a 100% increase in the firm’s pace of deployment in the past 12 months.
The vehicle is designated Fund VIII, reflecting Elevation’s investment heritage as part of Hong Kong-based SAIF Partners. This is the fifth fund the firm has raised as an independent entity, having spun out from SAIF Partners in 2011. Each of the first three had a corpus of USD 350m.
The fourth solo India fund closed on USD 400m in 2020, coinciding with a rebranding of the firm from SAIF Partners India to Elevation Capital.
Elevation said in a statement that seed and Series A rounds will remain its core. It will also continue its policy of backing only one start-up per vertical. The larger fund size will allow larger initial investments and participation in later-stage funding rounds.
The firm has invested nearly USD 2bn in more than 150 companies since 2011. Of these, 13 have gone on to become unicorns. Start-ups that achieved this status in 2021 include Acko, Meesho, NoBroker, Sharechat, Spinny, Urban Company, and Xpressbees.
Meanwhile, another portfolio company, digital payments platform Paytm, raised INR 183bn (USD 2.47bn) in India’s largest-ever IPO. Elevation realised proceeds of INR 20.3bn from the offering, with three funds partially exiting their positions. It retains an interest valued at about INR 65bn, even though Paytm is trading at a 71% discount to its IPO price.
“We believe that India’s tech ecosystem has now reached an inflection point. Not only is India’s GDP set to cross USD 5trn in five years, [but] this rising prosperity is augmented by foundational rails such as the UPI [universal payments interface] system, Universal ID, and streamlined taxation structures,” Elevation said.
“Adding value to this mix are favourable factors such as a deep professional talent pool with global tech exposure, soaring internet mobile penetration rates and strong global capital inflows.”
The firm expects India’s equity market capitalisation – already the fifth largest in the world at USD 3.2trn – to approach USD 10trn in the next 10 years. Over the same period, the country’s unicorn population, currently approximately 100, will grow 10x with local tech companies surpassing more than USD 2trn in combined valuation.
India VC managers raised a record USD 3.2bn last year. Fundraising highlights of 2022 to date include Accel Partners closing its seventh India fund on USD 650m, IvyCap Ventures reaching a first close of INR 16.1bn on its third fund against an overall target of INR 25bn, and Chiratae Ventures entering the market seeking USD 500m for a VC and USD 200m for an opportunity vehicle.
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