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3one4 Capital closes its Fourth Fund at $200 Million, Reinforcing its Focus on Early-Stage Tech Startups in India

May 8, 2023
5 mins

We are thrilled to announce that 3one4 Capital has closed its fourth early-stage fund (sixth fund overall) at $200 million (INR 1600 crore). The fund was vastly oversubscribed within a timeframe of 2.5 months since the inception of the raise process. Fund IV marks the continuation of the firm's flagship early-stage venture capital strategy.

Although Fund IV was oversubscribed to $250 million (INR 2000 crore), the firm has decided to adhere to its disciplined model and has reduced the accepted amount to $200 million in order to maintain the fund's intended size. Having invested despite muted market sentiment globally, we are deeply grateful to the leading global and Indian investors who have continued to support our strategy.

The first close of Fund IV was completed in March 2023, and over five deals have already been approved or invested in. The final close is expected by the end of Q1 FY 2023-24.

Having successfully raised six funds to date, 3one4 Capital is one of the fastest-growing VC firms in India. With the launch of Fund IV, the firm will now manage committed capital of INR 3,710 crore (~$510 million), with over INR 6,000 crore ($750 million) in assets under management. The portfolio companies of the funds have a cumulative market cap of over $7.5 billion (INR 60,000 crore), making it one of the largest homegrown VCs in India by committed capital and current AUM. These consecutive fund closures reflect the firm's consistent track record and performance in the Indian early-stage ecosystem.

Involved and Diverse Institutional Investor Base

3one4 Capital has a diverse investor base, including India's three systemically important banks, five of India's largest listed banks by market cap, eight of India's leading mutual fund operators, leading US university endowments, global sovereign funds, global corporations & insurance companies, India's leading corporations, and a selection of India's largest family offices. Fund IV is +90% institutional in its investor base.

Offshore Debut with Fund IV Launch at GIFT IFSC

Moreover, the launch of Fund IV marks 3one4 Capital's debut at GIFT IFSC and its first offshore vehicle, which highlights the firm's dedication to the growth of the Indian financial ecosystem and support for the establishment of an international financial center for startups. 3one4 Capital is among the first homegrown Indian VCs to go live in this domicile by working with global LPs to enter via GIFT IFSC.

Focus on Early-Stage Startups in Our Core Focus Areas

3one4 Capital will continue to focus on early-stage startups in Consumer Internet, SaaS, Fintech, and Enterprise & SMB digitization, while expanding investments in Digital Health, Climate Tech, and other emerging areas. The firm aims to invest in early-stage startups with cheque sizes ranging from $0.5 million to $5 million, with a median cheque size of $1.5 to $3 million. Additionally, the firm will also be looking at post-seed and pre-Series A funding rounds.

We will double down on India-specific businesses, given our lessons from market leaders such as Licious, WeRize, and KukuFM, and will remain bullish on India's consumption patterns. We also plan to continue deploying more capital into cross-border SaaS investments, given our positive experience partnering with leaders like DarwinBox, BetterPlace, and others. With our institutionalized and diversified investor base, it allows us to support our portfolio founders with a more global perspective and bring in more long-term capital.

3one4 Capital's Deep Involvement Model and Responsible Investing Approach

The firm's deep involvement model serves as a force multiplier for founders to achieve sustainable growth and long-term value creation. 3one4 Capital works closely with founders and subject-matter experts to strategize for product-market fit, defensibility, revenue growth, and impact. Its in-house teams in Finance, Governance & Business Integrity, Growth & Capital Development, and Research teams act as strategic partners to amplify portfolio companies' execution, growth, and reach.

At 3one4 Capital, we act proactively, support early standard-setting, and invest in durable technological assets that will solve for 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. We have worked diligently to help set new standards in transparency and governance, being the first Indian VC to be approved as a signatory to the UN PRI and a leading contributor to the Indian Responsible Investing community. Through our Responsible Investing approach, we are determined to play our part in helping India establish a nation-first imperative for technological development and socio-economic growth that is sustainable and inclusive.

Collaborative Network of Local and Global Co-Investors

3one4 Capital has worked with over 300 institutional investors that have co-invested in our portfolio companies alongside us. As India's economic growth continues to accelerate, we are seeing more top-tier capital entering the mid and late stages of the tech ecosystem. Our focus on building strong relationships with these global institutional investors and strategic partners reflects our deep engagement with our portfolio companies and our commitment to their growth and success.

At 3one4 Capital, we are deeply grateful for the opportunity to build an institution that can perform and compete at the highest levels while being mindful, intentionally inclusive, and truly diverse. We are also incredibly grateful to the founders who have placed their trust in us and allowed us the privilege to partner on their journey. We look forward to scaling up our intentional early-stage strategy with the launch of Fund IV 🚀

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