India's Blume closes fourth India VC fund on $250m
India’s Blume Ventures has closed its fourth fund targeting seed-stage tech start-ups on USD 250m, beating a target of USD 200m. Fund III raised USD 105m in 2020.
It follows a first close of USD 105m in November last year. The expectation was to close on target last March. The extension brings assets under management to more than USD 600m.
Blume said all its existing LPs participated as well as some new ones. Backers include global and regional family offices, Indian and overseas sovereign wealth funds, and emerging markets fund-of-funds. In previous vintages, it has been supported by the likes of Small Industries Development Bank, IIFL Wealth Management, Iconiq Capital, and Catamaran Ventures.
Blume was set up in 2010 by Karthik Reddy and Sanjay Nath, who met at seed investor Mumbai Angels and formed a plan to bridge a perceived gap between angels and larger institutional investors in India. The idea was to be able to move as fast as an angel but with an institutionalised approach. The team now numbers about 35.
The debut fund closed on USD 20m in 2012, while Fund II raised USD 60m in 2017. The first three vintages all featured continuation funds. There have also been several special-purpose vehicles. Domestic investors have traditionally dominated the LP base.
“Whether building domestically or for global markets, the best founders and LPs would like to work with a fund that can be considered world-class, which has spurred us to keep institutionalising and bolstering our platform, team and capabilities,” Nath, said in a statement.
“Thanks to an increasing reality of IPO and M&A exits, there is a resurgence of [second-time] founders and operators, as well as higher quality first-time founders.”
Fund IV will continue the strategy of its predecessors, aiming to back entrepreneurs either building to solve large impactful Indian problems or taking the best of Indian innovation to global markets. Areas of interest include education and financial technology, healthcare, robotics, artificial intelligence, software-as-a-service, enterprise software, and consumer internet.
The fund will invest in 30-35 companies. The larger size is expected to allow it to participate in more later-stage rounds. Initial equity checks will be in the USD 1m to USD 2.5m range, compared to USD 500,000 to USD 1.2m for the previous fund, reflecting a rise in valuation expectations.
Standout investees include credit card issuer Slice, insurance broker Turtlemint, and warehouse robot maker GreyOrange, all of which have raised sizeable rounds from global investors. There is also a significant focus on education technology through companies such as Unacademy and Classplus.
Valued at USD 3.4bn as of a Temasek Holdings-led USD 440m round last year, Unacademy is considered the second-largest edtech company in India behind Byju’s. Both have confirmed significant staff reductions in recent months amidst challenges including students returning to physical classrooms and post-pandemic screen fatigue.
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