A91 Partners closes second fund at $525 million | Economic Times

Mumbai: Investment firm A91 Partners has closed its second fund, notching up a corpus of around $525 million amid heightened deal activity in India, two people in the know of the matter said.The venture capital fund, which was spun out of Sequoia Capital India three years ago, has backed companies like Digit Insurance, cosmetics brand Sugar, software platform Exotel, among others, betting largely on companies across technology, consumer and financial services. A91’s Fund-II is nearly 50% larger compared to its maiden one, in keeping with the momentum risk investors have garnered on the continued bull run in the private and public markets. Sources aware of the development said that the Mumbai-based fund has roped in limited partners, or sponsors, like The Canada Pension Plan Investment Board and financial services major Allianz group. “They have also brought on board a few new endowment funds with as much as 90% coming in as dollar commitments. The rest of the capital will be domestic,” said a person privy to the details of Fund-II.Having made 11 investments and with $250 million in capital deployed, A91 will continue to focus on cutting cheques averaging $30 million but may look to back more technology firms through its latest fund.“As more businesses become technology-backed, the fund is likely to make greater allocation there. The idea is to back new-age firms which have a tech layer...,” said a source familiar with the fund’s workings.Some of its portfolio firms that have seen valuations rise significantly since it first invested include Digit Insurance, Exotel and Inshorts.Digit recently closed a $200 million financing round led by Sequoia Capital and IIFL Alternate Asset Managers at a $3.5 billion valuation. A91 had first invested in the company in December 2019 when it was valued at $800 million. A91 did not respond to ET's queries on the capital raising.Founded in 2018 by three former Sequoia Capital managing directors, Abhay Pandey, VT Bharadwaj and Gautam Mago, A91 had raised $350 million two years ago, one of the largest such fundraises by Indian general partners.The Indian startup ecosystem has seen an unprecedented flow of investor capital this year as the Covid-19 pandemic forced businesses to go digital.India has added 25 new unicorns — startups valued over $1 billion -- so far this year.Nearly $20.76 billion has been raised across 583 deals as of August 20, according to data provided by industry tracker Venture Intelligence.Even as startups across stages benefit from the bullish funding environment, risk investors have also gained from the current environment.Besides the overall global liquidity, exits for investors, IPOs by startups like Zomato, what has also helped Indian companies shore up never-seen-before funds is the Chinese government’s regulatory onslaught on technology firms locally.To capture this wave, limited partners, who are investors in funds, are also doubling down on India.ET reported on August 11 that Stellaris Venture Partners had raised $225 million for its second India-dedicated fund, almost three times the size of its $90 million maiden fund, launched four years ago.