India-US cross-border GP Pentathlon Ventures targets $55m
Pentathlon Ventures, a US-India cross-border early-stage investor focused on B2B software-as-a-service (SaaS) has launched its second fund with a target of USD 55m.
The GP said it was raising capital from a mix of Indian and global LPs, including individuals, corporations, and institutions. Its first fund closed on INR 760m (USD 9.1m) in 2021 and was said to be oversubscribed.
Pentathlon was founded in 2020 by a group of entrepreneurs and investors with experience at organisations such as Ideas to Impacts, Verisoft, Grassroots Business Fund, Ennovent, Globant, Rising Pharma, and Sapience. Much of the strategy is based on leveraging a community of SaaS operators to advise on go-to-market strategies, product distribution, and user acquisition.
The first fund backed 23 start-ups, some of which have received follow-on investment and have been exited. Standout deals include Spyne, a SaaS platform for creative professionals that attracted investment from Accel last year.
There is also ShopSe, a payments tech supplier that has raised about USD 11m from the likes of Beenext and Chiratae Ventures, as well as radiology start-up DeepTek Medical Imaging, which raised a USD 10m round last year featuring Tata Capital. Most investees – including these three – are India-headquartered.
The new fund will continue the firm’s strategy, which aims to bridge a perceived funding gap between the angel and Series A-plus stages. It will invest in about 25 B2B start-ups across enterprise digital transformation, e-commerce enablement, financial technology, vertical SaaS, applied artificial intelligence, cleantech, web3, and health-tech.
Pentathlon expects India to emerge as a dominant player in global SaaS as local talent connects with more international customers, including via well-established bridges with the US. Gireendra Kasmalkar, the firm’s managing partner, described Indian B2B SaaS as being on the “cusp of a huge virtuous cycle,” that will see local start-ups in the space become global leaders within the decade.
“The revenues coming from India-based B2B start-ups are expected to grow 25x in the next 8 years,” Kasmalkar said in a statement. “With an impressive 50% faster time to revenue, better revenue predictability and solid gross margins ranging between 70%-80%, it presents extraordinary prospects of building sustainable businesses.”
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