More pre-Series A money is on its way for early stage startups.
Former Mumbai Angels president Anil Joshi is raising $25 million for a new fund dubbed Dev Venture Fund. The technology sector-focused fund will invest at the pre-Series A stage. Joshi plans to raise up to 60 per cent of the fund corpus from domestic (rupee) investors and is currently in talks with HNIs, local family offices and institutions. The first close of the fund is tentatively slated for July.
The new fund was first reported by Mint.
“There’s an obvious gap in the market in terms of capital availability between the seed and Series A stages. We will first close fundraising in the domestic market and then seek out overseas investors for the offshore portion,” Joshi told StartupCentral over a telephonic conversation today. He does not rule out raising the offshore portion from larger venture capital funds. In the recent past, firms such as Sequoia Capital, Unilazer Ventures and SAIF Partners have backed smaller funds in this market.
The Mumbai-based fund would be looking to raise between Rs 1 crore and Rs 3 crore (between $160,000 and sub-$500,000) from each HNI investor, and between Rs 3 crore and Rs 10 crore (between $500,000 and $1.59 million) from each institutional investor. “We are talking to both private and public sector institutional investors,” he said.
Joshi, who stepped down from Mumbai Angels in November, started his career with Century Rayon and later spent four years with Artheon Electronics, a telecom, IT and energy focused business group. He joined Mumbai Angels, one of the first organized angel networks in the country, in July 2010 and led operations, including deal sourcing and due diligence.
With Dev Venture Fund — dev comes from development — Joshi hopes to channel his experience from Mumbai Angels into backing capital efficient businesses that have raised a seed round but are not yet ready for a Series A round. In terms of deal ticket sizes, that could translate into anywhere between $500,000 and $2 million. The fund will look at companies in sectors such as information technology, telecom and digital businesses.
The fund expects to start operations with a four-member team. Joshi is in the process of putting together the team and the asset management firm for the fund.
Dev Venture Fund joins a bunch of seed stage and pre-Series A stage funds that have entered the Indian market in the past couple of years. Most prolific among the lot are India Quotient, founded by former Seedfund executive director Anand Lunia, and Blume Ventures.