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Kae Capital raises $30 mn for fund focused on local start-ups

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Kae Capital raises $30 mn for fund focused on local start-ups.

Firm will allocate 10%of the fund to cater to non-tech start-ups such as manufacturing and FMCG companies.

Kae Capital, which invests in early-stage companies, has raised $30 million from existing and new investors as part of its second fund.

The firm will be raising an additional $10 million soon, said Sasha Mirchandani, founder and managing director of Kae Capital, on Thursday. He declined to share the names of the investors.

Kae Capital raised its maiden $25 million fund in March 2012. Investors in the first fund included venture capital firms Sequoia Capital, SAIF Partners and Omidyar Network; three global fund-of-funds—Axiom, Squadron Capital and Morgan Creek Capital Management; and a few high-net-worth individuals such as Manish Kejriwal, managing partner of Kedaara Capital, and Deep Kalra, founder and chief executive of online travel company MakeMyTrip Ltd.

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From the first fund, Kae has invested in nearly 25 start-ups, including online fashion portal Myntra (acquired by online marketplace Flipkart in 2014), mobile advertisement technology InMobi and US-based data analytics company Fractal Analytics.

The second fund has already invested in at least five start-ups.

The firm had exhausted its previous fund in mid-2015 and has since been warehousing its investments. Warehousing is a process that allows venture capital firms to invest in start-ups even when they have exhausted their funds or are yet to raise a new fund.

Bengaluru-based Nudgespot Technologies Pvt. Ltd raised $650,000 in a round led by Kae Capital.

Kae will invest the proceeds of the second fund in the next three-five years and plans to double the size of its investments. It has so far been investing a ticket size of $500,000 in early-stage start-ups, which will now be increased to $1 million. The follow-on ticket size also will be increased from $2.5 million to $4 million going forward.

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At a point of time when most venture capital firms are looking at technology start-ups, Kae will be allocating 10% of the overall fund to cater to non-tech start-ups such as fast-moving consumer goods companies and manufacturing start-ups.

The fund will have an investment cycle of 10 years, which could be extended by two years, if required.

Kae, which invested in a few US-based start-ups in its previous fund, said the new fund will be completely dedicated to Indian start-ups.

Seed-stage deals nearly tripled in the first 10 months of 2015 from the previous year, according to VCCEdge, a data service by media firm VCCircle Network.

Until 20 October, there were 24 seed-stage investments worth $12.6 million, up from nine such deals worth $2.8 million in the same period the previous year.

Source: Livemint.

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