Indian early-stage venture capital firm Blume Ventures on Monday said it has raised a USD 41 million “opportunity fund” to invest in a select group of portfolio companies. Formally known as Fund IIA which is meant for follow-on investments, Blume’s new fund is backed by family offices and institutional investors, along with its existing investors.
According to Blume Ventures’ partner Ashish Fafadia, who was quoted by local media Economic Times (ET), Fund IIA has been “an ideal opportunity for Blume to partner with these onshore capital providers as well as high-quality foreign institutions, given the attractiveness of both a shorter life fund and a very selective set of emerging winners in the portfolio.”
“We believe that domestic LPs such as family offices and serial entrepreneurs should partake of the momentum in Indian VC funded companies,” he said.
Karthik Reddy, co-founder and Investment Team member at Blume Ventures said that Blume plays a very active role in most of its portfolio startups even beyond Series B, but it had “little or zero reserves for any of these stars.”
“Our LPs saw the rationale and sponsored our opportunity fund strategy,” Reddy added.
With the new opportunity fund, Blume Ventures plans to invest in follow-on funding rounds of portfolio startups of Funds I, IA, and II. According to local media reports, Blume is looking to deploy the fund by mid-2020 and will invest in its startups as and when market opportunities arise for them.
The opportunity fund has already deployed capital to back companies including edtech platform Unacademy, robotics firm GreyOrange, insurance-tech startup Turtlemint, on-demand concierge service Dunzo, online beauty startup Purplle, hyperlocal delivery service Milkbasket, and health-tech solution provider Tricog, as per the reports.
This comes a week after Blume announced the final close of its third fund at USD 102 million.
Founded in 2010, by Karthik Reddy and Sanjay Nath, with an aim to bridge the gap between angels and larger institutional investors in the Indian market at the time, the Mumbai-headquartered investment firm has come a long way. In 2011, it raised a USD 14 million (INR 100 crore) domestic fund from high net-worth individuals, and five years later, it closed its second fund at USD 60 million. Over the last decade, it has backed over 130 startups and orchestrated 22 successful exits.