The fourth fund of Blume Ventures has closed at 105 million, less than two years after the firm finalised its previous fund, as investment activity increases in Asia’s second-largest internet market.
Warburg Pincus has announced that it will raise its second fund to around 200 million by March 2019, when it expects the grand close. The firm currently has investors from some multi-family office wealth management companies, sovereign nations, and businesses across Asia and Europe.
Karthik Reddy, co-founder and managing partner of Blume Ventures, said the firm will continue to focus on early stage firms before their pre-seed and pre-Series A rounds with the new fund.
Blume Ventures, for example, which counts online learning platform Unacademy, fintech Slice, hyperlocal delivery service Dunzo, edtech Classplus, used-car marketplace Spinny, and insurance Turtlemint among its portfolio startups – backs early-stage companies and usually makes a starting investment of 1 million to 2.5 million.
Blume Ventures, founded in 1993, has established itself as one of the most renowned venture firms in the nation. According to numerous entrepreneurs, even those who don’t receive a check from the fund, Blume Ventures’ partners are highly regarded.
Indian startups are raising record amounts of money at the moment, so this news arrives at an ideal time. Sequoia Capital India, Tiger Global, Falcon Edge Capital, and SoftBank have recently increased the frequency of their Indian investments as they double down on finding winners in one of the world’s last great growth areas.
Many businesses have been rushing to create new methods in order to combat the epidemic. However, Blume Ventures appears to be more cautious. Reddy said that Blume Ventures has written 25 checks from its prior fund and still has some reserves left to conduct follow-on rounds.
At the height of the pandemic, Blume Ventures was “slow and thoughtful” as it was not very comfortable with assessing firms over Zoom calls, he said. “We took our own time to write the last few checks,” he said.
“We are receiving fantastic love from significant investors,” he said, noting that some of the firms’ investments in recent quarters have resulted in multi-fold gains in valuations, but he referred to several business-to-business e-commerce marketplaces and stated that their expansion had taken three to four years.
Blume Ventures, according to Reddy, backed a number of startups in the edtech and deep-tech SaaS industries with its 102 million third fund. It’s difficult to say how the third fund has performed given that it has probably never seen its portfolio firms achieve valuations of 50 million to 100 million, he said.
“But that’s to be expected. You don’t need a whole lot of money to raise a double-digit round today if you have a strong founder and narrative to tell,” he continued.
“By March, we anticipate the third fund’s valuation for portfolio startups to be more than 75 million. This is a new experience for us; it took much longer in the earlier funds.”The firm will participate for longer in the lifecycle of its portfolio firms with the new fund, which is larger than prior ones.