With INR 1,001 Cr Fund, Chiratae Looks to Double Down On Growth Investments

After nearly two decades of existence, homegrown venture capital fund Chiratae Ventures (formerly IDG Ventures India) has forayed into growth investments with its maiden growth fund Chiratae Growth Fund (CGF-I). The fund closed at INR 1,001 crore on Wednesday and was oversubscribed by 34% from its initial target of INR 750 crore.

In an interaction with Entrepreneur India, TC Meenakshi Sundaram, Founder and Vice-Chairman of Chiratae Ventures said the fund is looking to back companies in their growth stage.

“We are mainly looking at companies that will use the capital for growth instead of survival,” Sundaram added.

In response to concerns about the slowdown in investment in India, Sundaram asserted that not every startup faces funding challenges. Companies that are profitable or are very close to profitability are able to raise funds in the market.

As per Sundaram, Chiratae’s target will be technology startups, from its portfolio and beyond, seeking Series C or later-stage funding.

CGF-I will invest in the range of INR 40-150 crore each in about 12-15 companies. It has already invested INR 100 crore in Lenskart from the growth fund.

“The lower ticket size will be INR 40-50 crore and it will go up to INR 150 crore,” Sundaram stated.

Several of Chiratae’s current investors, including Pratithi (the family office of Infosys Co-founder Kris Gopalakrishnan), 57 Stars (a global alternative asset manager), Asian Paints’ Vice Chairman and Non-Executive Board Member Manish Choksi and his family office have invested in the fund. IIFL, State Bank of India, and Axis Bank among others were new investors.

“As we embark on this exciting new chapter, we remain committed to identifying and investing in innovative startups that have the potential to drive transformative change and create long-term value. Our first growth fund enables us to continue supporting the growth and expansion of market-leading technology startups in India and beyond,” highlighted Sudhir Sethi, the Founder and Chairman of Chiratae Ventures.

According to Chiratae Ventures, the current market environment is favorable for growth investments since businesses are placing a higher priority on profitability and are amenable to reasonable valuations in growth rounds. The growth fund will invest about 75% of its capital in its portfolio companies.

Chiratae has raised six funds since its inception in 2006, totaling about USD 1.1 billion in assets under management (AUM). Its portfolio includes products in consumer technology, health technology, finance, and software-as-a-service. Bizongo, Curefit, Fibe, Firstcry, Myntra, PolicyBazaar, Pixis, Vayana, and Uniphore are just a few of the companies it has backed.

According to the firm, during the course of its over 130 investments, it has seen 48 exits, assisted in the creation of eight unicorns, and brought three companies public. Chiratae claims to have a track record of having returned capital to LPs in each of the last 12 years.

Family offices and domestic institutional investors are becoming more interested in investing in India-focused funds that support early-stage and growth-stage firms. Presently, domestic investors have indubitably increased their exposure to startups, from seed-angel funds to Special Opportunities funds. The fund sizes have likewise gradually increased. Recently, funds such as IIFL, Edelweiss, and Avendus, among others, raised money domestically to invest in growth-stage businesses.