Kae Capital raises $30 mn for fund focused on local start-ups


Kae Capital founder and MD Sasha Mirchandani.Kae Capital founder and MD Sasha Mirchandani.

New Delhi: Kae Capital, which invests in early-stage companies, has raised $30 million from existing and new investors as part of its second fund.

The firm will be raising an additional $10 million soon, said Sasha Mirchandani, founder and managing director of Kae Capital, on Thursday. He declined to share the names of the investors.

Kae Capital raised its maiden $25 million fund in March 2012. Investors in the first fund included venture capital firms Sequoia Capital, SAIF Partners and Omidyar Network; three global fund-of-funds—Axiom, Squadron Capital and Morgan Creek Capital Management; and a few high-net-worth individuals such as Manish Kejriwal, managing partner of Kedaara Capital, and Deep Kalra, founder and chief executive of online travel company MakeMyTrip Ltd.

From the first fund, Kae has invested in nearly 25 start-ups, including online fashion portal Myntra (acquired by online marketplace Flipkart in 2014), mobile advertisement technology InMobi and US-based data analytics company Fractal Analytics.

The second fund has already invested in at least five start-ups.

The firm had exhausted its previous fund in mid-2015 and has since been warehousing its investments. Warehousing is a process that allows venture capital firms to invest in start-ups even when they have exhausted their funds or are yet to raise a new fund.

Bengaluru-based Nudgespot Technologies Pvt. Ltd raised $650,000 in a round led by Kae Capital.

Kae will invest the proceeds of the second fund in the next three-five years and plans to double the size of its investments. It has so far been investing a ticket size of $500,000 in early-stage start-ups, which will now be increased to $1 million. The follow-on ticket size also will be increased from $2.5 million to $4 million going forward.

At a point of time when most venture capital firms are looking at technology start-ups, Kae will be allocating 10% of the overall fund to cater to non-tech start-ups such as fast-moving consumer goods companies and manufacturing start-ups.

The fund will have an investment cycle of 10 years, which could be extended by two years, if required.

Kae, which invested in a few US-based start-ups in its previous fund, said the new fund will be completely dedicated to Indian start-ups.

Seed-stage deals nearly tripled in the first 10 months of 2015 from the previous year, according to VCCEdge, a data service by media firm VCCircle Network.

Until 20 October, there were 24 seed-stage investments worth $12.6 million, up from nine such deals worth $2.8 million in the same period the previous year.