India Quotient gets $64 million from domestic investors for first close of 4th fund

India Quotient, a seed-to-early-stage venture capital firm, has made its first close of its fourth fund at $64 million from domestic investors, including leading family offices.

Top entrepreneurs like Flipkart cofounder Binny Bansal, Paytm’s founder Vijay Shekhar Sharma and Makemytrip cofounder Deep Kalra are among the fund’s investors. It is also in discussions with foreign investors for the rest of the capital raise — $80 million in total.

Anand Lunia, founding partner of India Quotient, told ET the total fund size could get extended to $90-$100 million due to the increased interest from limited partners (LPs), who invest in venture capital funds. According to Lunia, some of the fund’s LPs are also investors in India Quotient’s portfolio companies like ShareChat and Sugar Cosmetics, where it has taken partial exits.

“We have raised nearly 80% of the capital really fast. The top 10 family offices have put money in our fund. For the rest of the fund, we are looking at a couple of large cheques from investors in the US, Singapore, instead of several smaller investments,” Lunia told ET.

“It would be oversubscribed given the ongoing discussions and we may have to increase the size but it will be less than $100 million as we want to remain a concept-stage investor,” he added.

According to him, India Quotient has also closed a $40 million Opportunities Fund, which is typically used to double down on best performing companies in the portfolio.

Started by Lunia and Madhukar Sinha in 2012, India Quotient’s first fund was $6 million in size while the next two had a corpus of $20 million and $60 million, respectively.

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Gagan Goyal was recently made a general partner at the fund. Pankaj Dinodia, the chief executive of Dinodia Capital Advisors, has also joined the firm as the chair of its LP advisory committee. Dinodia is also the son-in-law of Pawan Munjal, chairman, MD & CEO of Hero MotoCorp.

Lunia said he has already backed four startups from the new fund, one of which, Gaugau, is a startup in the dairy farming space. India Quotient’s new raise comes at a time when the deal making pace has increased in the early-and seed-stage phase. Funds like Sequoia’s Surge as well as other VCs are are backing young and idea-stage startups aggressively. “We are looking beyond off-beat themes to stay ahead of others,” Lunia added.

The firm has returned the principal amount of capital from its fund 1 and fund 2 to investors. It also made partial exits from portfolio firms like ShareChat and Sugar Cosmetics.

It is said to have made a massive gain of over 500 times from selling parts of its stake in ShareChat earlier this year when it raised $502 million at a valuation of little over $2.1 billion. From Sugar Cosmetics, it made a 50-times exit on its initial investment, Lunia said.

Over the next one year, it may make further exits from some of its portfolio firms from fund 1 and fund 2 as their valuation has risen multiple times since India Quotient first backed them.

It typically invests anywhere between Rs 1 crore and Rs 15 crore and will continue the same strategy.

India Quotient has backed over 80 startups including Lendingkart and Cityflo.

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