India's 8i Ventures hits first close on Fund II
8i Ventures, an India-based early-stage venture capital firm, has achieved a first close of approximately USD 25m on its second fund. The overall target is USD 50m.
Vikram Chachra, a general partner at 8i, told AVCJ earlier this year that all the LPs in Fund I – which closed on USD 15.5m in 2021 – would re-up for Fund II. The first close, originally slated for the end of June, would comprise Indian family offices and the firm wanted to bring global institutional players into the final close.
The firm’s family office supporters include the Kothari family, owners of DSP Investment Managers, the Salgaocar and DLF family offices, and the Singapore-based Thakral Family Office.
Fund II will make 15-20 investments, writing cheques of USD 1.5m-USD 2m in seed-stage rounds, although overall commitments over the course of several rounds can exceed USD 10m. Chachra told AVCJ that 8i might be able to put USD 50m into a single company if it mobilises LP co-investment. The focus areas remain financial technology and commerce.
“We believe fintech is the single largest venture opportunity in India. Every single friction point in India’s financial economy is a potential billion-dollar start-up opportunity. Our key insight when we launched Fund I was that consumer payments and commerce is a trillion-dollar opportunity,” Chachra said in a statement cited in local media reports about the first close.
“Since then, digital payments have swelled from USD 200bn a year to USD 720bn now. With Fund II, we have an added focus on B2B fintech and commerce – which we believe to be the next trillion-dollar market in India.”
The firm’s standout exit to date is financial software provider M2P Fintech. 8i participated in multiple funding rounds over two years before selling one-quarter of its holding in June for a 36x return. Between early 2020, when 8i led a seed round, and the date of the partial exit, M2P Fintech’s valuation grew 60x to USD 600m.
Fund I is now said to be marked at 4x with an IRR of 122%. It has made 13 investments to date with cheque sizes ranging up to USD 1.3m. In addition to M2P, portfolio standouts include credit card issuer Slice, which raised a USD 220m round led by Tiger Global Management and Insight Partners last year at a valuation of USD 1bn.
Fund I is tracking a 100% IRR and 27% of the principal has already been returned to LPs. The portfolio also features credit card issuer Slice, credit application programming interface (API) specialist BharatX, digital payments platform Easebuzz, crypto payments platform TripleA, non-fungible token (NFT) player Revise, health supplements retailer BBetter, and coffee brand Blue Tokai Coffee.
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.
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