India's 8i Ventures seeks $50m for Fund II
8i Ventures, an India-based early-stage venture capital firm that recently made a partial exit from software supplier M2P Fintech with a 36x return, is targeting USD 50m for its second fund.
“The first close will happen at about USD 25 million by the end of June,” said Vikram Chachra, a general partner at the firm. “All our existing LPs are re-investing in our second fund. On average, contributions to Fund II from existing LPs are 1.5-2x what they put into Fund I.”
The Fund I LP base comprises Indian family offices. They include the Kothari family, owners of DSP Investment Managers, the Salgaocar and DLF family offices, and the Singapore-based Thakral Family Office. The founders of some portfolio companies, such as Mohit Dubey of automotive listings business CarWale, are also among the Fund I investors.
8i would like to bring global institutional investors into the second fund. “Our final close will largely be through institutional capital,” Chachra said, noting that the firm has already returned more than one-quarter of the Fund I corpus to LPs.
Chachra began his career as a technology entrepreneur in Silicon Valley in the late 1990s. He made numerous seed investments – including CarWale, which was sold to CarTrade in 2015 – before co-founding India distress and special situations investment firm Eight Capital in 2005. Chachra teamed up with Vishwanath V, previously a brand specialist at Hindustan Unilever, to form 8i in 2018.
The GP invests in financial technology and direct-to-consumer (D2C) e-commerce brands. There have been 13 investments out of Fund I, which closed on just under USD 15.5m in 2021. Portfolio companies include M2P Fintech, Slice, BharatX, Easebuzz, TripleA, Revise, BBetter, and Blue Tokai Coffee. A 14th deal is in process; when it closes, the fund will be fully deployed.
M2P Fintech is one of two exits to date; Chachra declined to name the other. Having participated in multiple funding rounds for M2P Fintech over two years, 8i recently sold one-quarter of its holding. The start-up’s valuation has grown 60x to USD 600m since 8i led a seed round in early 2020.
Fund I is now marked at 4x with an IRR of 122%. Distributions to paid-in (DPI) is 0.27x. Of the remaining portfolio companies, credit card issuer Slice has gained significant traction. The company closed a USD 220m round last year at a valuation of USD 1bn.
8i writes equity cheques of USD 500,000 to USD 2m, but overall commitments to individual companies over the course of several rounds can reach USD 10m. “Ideally, we are looking to treble our ownership, such that we hold at least 10-15% of select portfolio firms that are category winners at the time of our exit,” Chachra said.
With certain LPs keen to co-invest alongside Fund II, he noted that 8i might be able to commit up to USD 50m in aggregate to individual companies.
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