Through the Orient Growth Fund-II, the firm aims to increase its investment in India by backing early-stage venture capital firms, its managing partner Rinze Verbeek told ET.
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“Similar to our first fund, this second fund also concentrates on early-stage venture capital opportunities in India and Southeast Asia. While our first fund did include some investments outside of these regions, we have grown increasingly convinced of the promising development within India and Southeast Asia’s VC ecosystems,” Verbeek said.
Orient Growth Ventures’ first fund was $25 million in size and was raised in 2020.
“Consequently, we’ve decided to further refine our focus with this new Orient Growth Fund II, exclusively directing the Fund’s capital to India and Southeast Asia. Moreover, we have decided to increase our allocation to India, as we see the Indian market as a highly attractive investment destination because of its robust economic growth and the maturity of its venture capital ecosystem,” he added.
Verbeek also pointed out that while the firm did not focus on any specific sector, it was noticing an increased interest in Indian electric vehicle infrastructure, climate and agritech spaces.
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In a statement, the firm said that Orient Growth Fund-II is backed by both existing and new limited partners, including European high net worth individuals, tech entrepreneurs, and family offices across Europe and Singapore.Facing macroeconomic headwinds, overall funding in Indian startups plummeted almost 70% to $7.5 billion in 2023, as investors remained cautious, data from Venture Intelligence showed. However, despite a slowdown in growth and late-stage funding, India’s early-stage startups have been raising funds with investors in this space also closing record funds over the past 18-24 months.
In 2022, venture firms such as Elevation Capital and Lightspeed Venture Partners raised closed funds at $670 million and $500 million, respectively.
In the same year, Peak XV Partners (then Sequoia Capital India and Southeast Asia) closed its largest fund focused on the region at $2.85 billion, while Accel picked up $650 million for India and Southeast Asia.
In December 2022, Blume Ventures, of which Orient Growth Ventures has been one of the limited partners, closed its Fund-IV with a corpus of $290 million, its largest so far.
Verbeek said that its Fund-I was currently tracking an internal rate of return of 23%. “However, it is important to acknowledge that the fund is still in its early stages. The upcoming years will therefore be important in achieving our performance targets.”