IvyCap Ventures, a prominent early-stage investment firm, announced on Tuesday the successful closure of its third funding round, amassing a total of ₹2,100 crore and surpassing its initial target by 40%. The fund, originally set at ₹1,500 crore, expanded through the strategic use of a greenshoe option, allowing the firm to raise additional capital to meet investor demand.
Vikram Gupta, the founder and managing partner of IvyCap Ventures, revealed that about 90% of the fund’s capital was sourced from domestic investors. The remainder came from a global network of alumni from the Indian Institutes of Technology (IITs), underscoring the strong ties and ongoing support from the prestigious institutions’ community.
The fund attracted a diverse range of contributors, with 60% of the capital raised from existing institutional investors who had also backed IvyCap’s first two funds. New participants in this round included IIT alumni and family offices, each contributing 20% of the total capital. This marks the first time family offices have participated in IvyCap’s fundraising efforts, highlighting the growing interest in early-stage investments among private wealth managers.
With the latest fund closure, IvyCap Ventures’ assets under management have soared to ₹5,000 crore. The firm plans to invest in approximately 25 new companies through seed money and Series A investments, with an average initial commitment of ₹30-50 crore per company. Gupta outlined the strategic allocation of the fund, noting that 25% is earmarked for new investments, about 20% for follow-on rounds, and a smaller portion of 5% dedicated to seed-stage investments.
This strategic shift towards seed-stage funding marks a new direction for IvyCap, which has traditionally focused on Series A rounds. Gupta explained that the decision to include seed investments stems from the firm’s confidence in managing longer exit timelines, supported by investor approval to venture into riskier early-stage funding.
IvyCap’s third fund has already been partially deployed, with 40% invested across a variety of sectors including education technology, health technology, and consumer technology. The portfolio includes promising startups like GradRight, Flexifyme, and Eggoz, as well as follow-on investments in established successes such as LendBox and Biryani By Kilo.
Highlighting the impact of its investments, Gupta shared insights into India’s startup ecosystem, which boasts approximately 125,000 registered startups. Of these, around 25,000 have received angel funding, while 5,000 have progressed to secure Series A funding. He emphasized the potential for scaling operations within this segment, noting the crucial role of follow-on funding and structured support to elevate these startups to unicorn status.
In a notable success story from its previous funds, IvyCap Ventures achieved a significant exit from Purplle, which provided a return of 22 times the investment. This exit positioned Purplle as India’s first ‘dragon’—a term Gupta uses to describe a company that returns an exit value exceeding the entire fund’s value. He expressed optimism about replicating this success with other portfolio companies, highlighting BlueStone as a potential second dragon.
As IvyCap Ventures embarks on this next phase of investment, its strategy focuses on deep tech, including AI, machine learning, and Internet of Things, as well as emerging sectors like agritech and spacetech, demonstrating its commitment to fostering innovation across a broad spectrum of industries.
