“A91 has expressed to its LPs (restricted companions, or sponsors in funds) that they’re aiming to boost their third fund at $700-750 million… They may launch and market the fund after a number of months,” one in all individuals within the know stated.
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A91 Companions started life in 2018 and had racked up $350 million for its maiden fund. Three years later, it picked up $550 million for its second fund to deploy throughout late-stage enterprise and early-growth funding rounds. To this point it has invested half of the capital from Fund-II throughout 9 firms and is predicted to shut one other offers within the coming months.
ETtechBased by former Sequoia Capital India (now Peak XV Companions) companions Abhay Pandey, VT Bharadwaj and Gautam Mago, A91 focuses on investing firms throughout know-how, shopper and monetary companies.
The agency’s talks to boost capital come within the backdrop of different home biggies additionally lining up recent dry powder. ChrysCapital and Kedaara Capital, for instance, are prone to shut anyplace between $1-2 billion India-dedicated automobiles this yr.
Uncover the tales of your curiosity
Regardless of tech-led enterprise funds lagging behind in money distributions to LPs, diversified investments corporations have been capable of shore up a excessive stage of curiosity from world sponsors. Seen as extra conservative and personal equity-like, these funds have been offering constant and steady returns to LPs.
VC corporations, however, usually purpose for outsized returns and make investments early in startups.
Exits, Returns
A91’s partial exits embody those from energy-efficient small home equipment model Atomberg in a spherical led by Temasek and Steadview Capital and spice maker Pushp the place Nikhil Vora’s Sixth Sense Enterprise purchased a secondary stake from the fund.
Different important bets embody Sugar Cosmetics, software program agency Exotel, pharmaceutical firm La Renon, and silver jewellery-focused startup Giva. Amongst its portfolio, Digit Insurance coverage is prone to go public this yr.
With an enormous leap in fund dimension, A91 might look to extend its common cheques from $20-30 million to $35-40 when from Fund-III, individuals within the know stated.
“Their technique is to maintain backing capital environment friendly, development companies throughout sectors,” stated an individual conversant in the fund’s considering. “The cheque sizes might go up as soon as the brand new fund is raised and begins to get deployed later this yr,” the individual added.
On the time of asserting its Fund-II, A91’s Pandey had informed ET that they had upped the corpus considerably holding in thoughts the market alternative in India. “Once we launched the primary fund in 2018-19, we had a sure set of alternatives in India that we wanted to deal with as per our group’s bandwidth and $350 million was good then… However the market alternative has expanded, which is why we are able to now make investments $25-$30 million throughout 15-17 firms with a bigger sized fund, that’s the maths we did,” he informed ET in November 2021.
