The new opportunity fund of early-stage venture capital company Blume Ventures has made its first closing at Rs 200 crore (about $25 million), or almost half of the total amount it aims to raise by the end of August.
According to the partners of the venture capital firm, Blume, three-fourths of the corpus would be used to buy assets held by its current funds, providing investors with an exit strategy.
Exotel, Grey Orange Robotics, Smallcase, Slice, and Unacademy are just a few of the firms that Blume has sponsored.
According to Ashish Fafadia, partner at Blume Ventures, “We have a very large number of companies doing very well, and our Fund-I is coming to an end.” “we’ve got two issues we wish to fix. We want to ensure that we have the corpus to increase our investments in up-and-coming winners, and we also want to find a way to hold positions in any extremely strong Fund-I companies that are planning on going public in the next 4-5 years.
Investment funds are subject to restrictions set forth by the Securities and Exchange Board of India, and if the fund closes, investors must receive their money back. So, Fafadia remarked, “I can either sell these businesses or end my journey, or I can open a fund like this and acquire those businesses.”
The company stated in December that it had closed the $290 million Fund IV and that it had started a new fund shortly after. This was done at a time when India-focused venture funds were raising record amounts of money despite a worldwide macroeconomic crisis.
Investors in Blume’s previous funds make up the new opportunity fund’s limited partners.
Nine firms will be included in the portfolio of the Rs 400 crore Blume Ventures opportunity fund, of which four—Intracity, Cashify, Carbon Clean, and Zopper—will be acquired from Fund-I. The final five will also be startups in the Blume portfolio. The VC firm has already completed its investment from the fund in online beauty product retailer Purple.
Because the portfolio is pre-disclosed, investors who invest in this fund are aware that 75 percent of the money will be spread across these nine businesses. We can choose what percentage of the remaining 25% comes from Blume’s portfolio, but the risk profile needs to be identical.
According to the Bengaluru-based venture capital firm, it raised an opportunity fund of comparable size in 2021 and used the money to grow its investments in businesses like Exotel, Grey Orange Robotics, Smallcase, Slice, Unacademy, and WebEngage.
Recently, Arpit Agarwal and Sajith Pai, two senior members of Blume’s investment team, were promoted to investment partners. Agarwal, who joined Blume in 2014, is in charge of the sector for new technology, which includes things like climate technology and electric cars.
Pai, alongside Reddy, is the market leader in the domestic consumer and business-to-business (B2B) online markets for brands, edtech, and health.
Blume was founded in 2010 by Reddy and Nath, and it primarily invests in technology firms’ pre-seed to pre-Series A fundraising rounds.
