The India-based venture capital firm, Orios Venture Partners has delayed the final close of its third fund for a second time. This pushes the deadline again to the end of 2024, with a targeted raise of $200 million for the fund but already raising approximately $100 million with investors.
PC: Moneycontrol
Background of Orios Venture Partners
Another of the AIFs established in 2013, by Rehan Yar Khan and Anup Jain, Orios Venture Partners focused on early tech companies in India. It invested in some really outstanding ones, such as PharmEasy and GoMechanic. The firm has over $300 million across its funds and seems to back interesting startups.
The Journey of The Third Fund
The third fund was launched back in January 2021 and was originally supposed to close during the middle of 2022, facing multiple market-related and economic challenges in the closure push to the end of 2023 and the latest push at the end of 2024. Repeat delays are happening, reflecting how VC firms can struggle to get their commitments in place with investors amid unsettled times.
Reasons for Delay
Several factors contribute to the delay in closing the third fund. Global economic slowdown, coupled with rising interest rates and inflation, has made investors sit on the fence. Furthermore, the venture market itself has slowed, with fewer deals and lower valuations compared with the boom years of 2020 and 2021, therefore making it quite tough for firms like Orios to mop up the desired quantum of capital.
Impact on Startups
That is bound to have an impact on the startup ecosystem in India. Orios Venture Partners has been one of the most prolific funding providers at the early stage to startups. Now, with the closure pushed back, it could really get tough for the component startups to raise funding to scale up operations. This translates into a slow growth factor for what has been an otherwise vibrant and fast-growing sector of tech startups in the Indian economy.
Orios’ Strategy Moving Forward
Not deterred by the challenges, Orios Venture Partners has still glimpsed the light at the end of the tunnel. Hence, the firm is not only continuing to back its portfolio companies but is also actively scouting for new investment opportunities. The venture capital has been in constant dialogue with existing investors, sources said, in order to reassure them on strategy and potential of the Indian startup ecosystem. One bright spot is that they are directing their investment in sectors like fintech, health tech, and consumer tech, which have shown resilience and probably will be ready for growth even in times of economic challenges.
Market Sentiment
The delay in the closure of Orios’ third fund is a pointer to the broader market sentiment. Across the world, it would seem that venture capital firms face the same issue. An otherwise exuberant market has cooled, and investors are now being very cautious about where they deploy their money. Geopolitical tensions coupled with expectations from the COVID-19 pandemic aftermath and continuous economic uncertainties at large have put them into this cautious mode.
The decision of Orios Venture Partners to hold back the closure of its third fund mirrors the exact challenges couched in the current venture capital landscape. Though it comes with some amount of risk for startups seeking to be funded by this firm, the delay also shows commitment to making sure they raise the right amount under good conditions. As the market undergoes evolution, Orios and other venture capital firms have to really sail through these challenges very carefully in order to be able to continue supporting innovation and growth within the startup ecosystem.
