Matrix seeks $450m for fourth India fund
Matrix Partners has launched its fourth India venture capital fund with a target of USD 450m.
Fund III closed on USD 320.7m in 2019 and expanded the firm’s remit to include later-stage investments. Fund II raised USD 410m in 2016 with support from Adams Street Singapore.
Matrix India has made more than 200 investments since its inception in 2006 and currently claims assets under management of more than USD 1bn. It has achieved at least 14 exits. The core themes are consumer technology, B2B, enterprise, healthcare, and financial technology.
Portfolio standouts include news and media app Dailyhunt, fintech provider Razorpay, and B2B platform OfBusiness, which are valued at USD 3bn, USD 7.5bn, and USD 5bn, respectively. Matrix is also an investor in ride-hailing platform Ola, which raised a pre-IPO round last year at a valuation around USD 5.5bn, as well as its electric vehicle spinout which has been valued at USD 3bn.
It comes amid a general pivot of global VC interest from China toward other Asian growth markets in recent quarters. India has benefited in particular from this trend due to an emerging domestic IPO market for pre-profit businesses, strong digitalisation outside of major cities, and confidence around its role as a back-end hub for global software-as-a-service players.
Several of Matrix’s peers have consequently raised substantial India funds in the past 12 months. They include Sequoia Capital (USD 2bn), Accel (USD 650m), Elevation Capital (USD 670m), Chiratae Ventures (USD 700m), and A91 Partners (USD 550m). Meanwhile, Lightspeed India Partners, which added three new partners earlier this year, is said to be targeting USD 500m for its next vintage.
Cold water was splashed on the groundswell as early as November last year, when a disappointing IPO for fintech leader Paytm saw its shares fall 40% in the first two days of trading. Paytm currently has a market capitalisation of INR 407bn (USD 5.2bn) versus INR 1.1trn in November.
There are expectations of greater scrutiny around valuations and metrics such as customer acquisition costs going forward.
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