Blume Ventures bags $30 million for Fund-II
Early stage technology investor, Blume Ventures has completed the first close of little over $30 million (Rs 200 crore) for Fund-II.
With this first close, Blume has raised just over half of its Fund-II target corpus of $60 million. ICONIQ Capital participated in this close as a lead investor. The other larger and early supporters in Fund II include IIFL Wealth, the Government’s India Aspiration Fund, administered through SIDBI, and Catamaran Ventures.
Valley-based ICONIQ Capital is a global multi-family office and merchant bank for a group of influential families, Mumbai-based IIFL Wealth is a wealth management firm, and Catamaran is venture fund floated by chairman emeritus of Infosys Narayan Murthy.
“Seeing the performance of Fund I which did relatively well, we were confident to commit more to Fund II. The returns were good in absolute numbers and IRR,” said Prashasta Seth, CEO, IIFL, AMC. IIFL is investing a portion of its Rs 400 crore fund it launched this year in Fund II.
Blume aims to complete the second close by late February said its cofounder and managing director, Karthik Reddy.
Unlike Fund-I, that was wholly domestic money, this one will predominantly have overseas institutional investors — a mix of corporates, institutions and family offices (including from Valley and Japan) — along with some domestic high net worth individuals.
“At a moral level I felt I needed to offer them (domestic HNIs) a chance to invest again, but when they chose not to invest I’m replacing it with institutional money. It’s also a long term institutional building process.”
“Besides, cost of collecting small cheques from overseas HNIs is not viable either.” With this new fund, Blume’s moving up the value-chain and will be cutting higher-ticket cheques, as a lead or co-lead investor (with an institutional or strategic investor), starting from $250,000 to as much as $500-$700,000, compared to Fund I where it invested as low as $50,000 and up to $250,000 across all 70 portfolio companies.
“We will be more significant in the first round — both in stake an dollar terms — to maintain our stake in series A and B,” Reddy stated.
“Also, because fund sizes and valuations have increased. A lot of companies need one booster cheque, a convert note or a pre-series A round to push them to a successful negotiation of a solid Series A.”
Blume may even go on to invest as much as $1 million to $1.5 million in a winning company over two-three cheques, he said.
It’s earmarking a third of its deployable capital from Fund II for 40-45 fresh investments with remainder for follow-on rounds, through the investment cycle.
As far as sectorial segmentation goes, Blume plans to get deeper into technology, and is allocating about 50% of money from new fund for classic consumer internet and SME companies, and approximately 20% each for deep technology ventures, SaaS/ software and hardware startups. “Anything which addresses a customer segment outside first 100 million broad band users- rural, languages, video, content- primarily businesses that are getting empowered with mobile technology,” Reddy said in context to SME focus.
It has already announced four investments from the new corpus – Zentaix, Roadrunner, Chiller, and Mock Bank- and is expected to close another three or four by mid-January.
Blume reported about 10 exits from Fund I (Rs 140 crore), and recent larges ones include Taxiforsure, Zipdial, and Promptec. It wrote-off 15 companies while 22 went on to raise Series A rounds with another four-five raising Series B.
75% of Fund I focused on internet mobile, 15% on deep technology (IoT, robotics and clean technology), with the balance in offline consumer companies. Current Fund I portfolio companies include Grey Orange Robotics, Zopper, Purplle, and Now floats.