Sep 13, 2017

Sasha Mirchadani's Kae Capital raises $53 million for second fund International backers, who contributed to 40% of the corpus, include institutional investors like Quilvest, Velos Partners and Axis Capital.ET Bureau  |  Updated: September 13, 2017, 09:38 IST Early-stage venture capital firm Kae Capital has closed its second fund with a corpus of $53 million, exceeding the initial target of $40 million as it got the backing of some of the country's top entrepreneurs and global Fortune 500 companies as well. Founders like MakeMyTrip's Deep Kalra, BookMyShow's Ashish Hemrajani, Quikr's Pranay Chulet, Hero's Sunil Munjal, GVK's GVR Reddy, Genesis Colors' Sanjay Kapoor and Infosys cofounder Kris Gopalakrishnan are among the investors in the fund International backers, who contributed to 40% of the corpus, include institutional investors like Quilvest, Velos Partners and Axis Capital. With the new fund Kae Capital, founded by Onida Group's Sasha Mirchandani , will also invest in non-tech consumer brand startups besides continuing the focus of backing consumer internet and software startups. “There is a huge untapped potential in the consumer space which is now playing out. There is far less competition, lots of good entrepreneurs are coming out in this space and you can build a profitable business with requiring the kind of capital consumer internet businesses do,“ said Mirchandani, adding that 20% of the fund will be invested in such transactions while the remaining will be equally split between consumer internet and softwareenterprise companies. Kae has already made such investments backing companies like nutraceuticals maker Innovcare and Timla Foods, makers of ready-to-eat popcorn sold under the brand PopiCorn.Mirchandani was one of the first angel investors in the country backing companies like analytics player Fractal, mobile advertising player InMobi and online fashion retailer Myntra. He formalised his angel investment by setting up Kae Capital, which raised its debut fund of $25 million in 2012. Kae will continue to focus on seedstage deals, making 7-8 investments every year of $700,000-800,000. The larger fund allows it to take total investments in a startup to up to $5 million across series-A and series-B. Mirchandani has also been able to rope in a strategic investor from China and global communica tions major, besides ven ture capital firms as back ers of the fund which it can le verage. “Because we have a very glo bal LP base they can co-invest with us and also open doors with other similar companies they have backed in their markets, which becomes priceless for us and the portfolio,“ he said. Kae Capital's new fund comes at a time when sentiment in the startup world is picking up, even though pace of early stage deals has slowed down. Seed rounds witnessed a steep 53% fall in April-June 2017 to 22 transactions as compared to the 47 deals in the same period in 2016, according to data from Venture Intelligence. The series-A round was the only category to wit ness a rise, climbing 15% in to 39 transactions during the pe riod. This was primarily due to large venture capital firms like Sequoia and SAIF Partners, who actively started making seed deals in 2014 and 2015, slowing down very early-stage investments and putting the focus back on series-A and series-B deals. In 2016, VC firms raised a record amount of capital despite number of investments in the market slowing down and valuations starting to cool off. Led by local affiliates of Silicon Valley heavyweights, Sequoia Capital and Accel, VC funds dedicated to India raised a total $2.2 billion in 2016 as compared to $1.5 billion in the year prior, according to data from Venture Intelligence.