Bengaluru-based venture capital (VC) startup 3one4 Capital has closed its fourth early stage investment fund, Fund IV, at $200 Mn. The VC firm plans to invest in early-stage startups with larger cheque sizes, ranging from pre-seed to Series A, with cheques between $0.5 Mn to $5 Mn. The median cheque size for these investments will be in the $1.5-$3 Mn range. The VC firm said that it would also look for potential post-seed and Pre-Series A funding rounds. The fourth early stage fund is 3one4 Capital’s sixth VC fund overall and will take its total committed capital to $510 Mn and assets under management (AUM) to $750 Mn.
According to 3one4 Capital, the fund saw its first close in March 2023, and it has already invested in or approved five deals. The final close is expected by the end of Q1FY24. The VC firm will focus on sectors such as consumer internet, SaaS, and fintech while increasing investments in newer areas such as healthtech, climate tech, and more.
Siddarth Pai, partner, CFO and ESG officer, 3one4 Capital, said that the firm acts proactively, supports early standard-setting, and invests in durable technological assets that will solve the needs of the future. With its prompt adoption of global consensus frameworks like SDGs and ESG, India can lead the way in establishing a new paradigm of technological development in line with these forward-looking principles.
The fund close at 3one4 Capital comes as investors in India have announced, launched, or closed funds worth nearly $3 Bn since the start of 2023, per data compiled by Inc42. The fund close also comes at a time when the Indian startup ecosystem has been reeling under funding freefall. According to Inc42 data, Indian startups could only manage to raise $888 Mn in funding in April 2023, down 66% compared to last April’s $2.6 Bn.
3one4 Capital has recently promoted Nruthya Madappa to partner at the VC firm. The VC firm has backed over 60 startups, including unicorns Licious and Open, soonicorns Jupiter, Yulu and Kuku FM, and other big names such as Koo, Pazcare, Growfin, ePlane.ai, BetterPlace, Breathe Well-Being, and others.
The VC firm’s fourth early stage fund is said to have seen oversubscription within 2.5 months of its launch to $250 Mn. However, 3one4 Capital did not expand the fund to match the oversubscription, closing it at the target amount. 90% of the investors in Fund IV were institutional investors, including three ‘systemically important’ banks, five listed Indian banks, eight mutual fund operators, US university endowments, global sovereign funds, global corporations and insurance companies, India’s corporations, and a selection of family offices.
