Transformative Capital for the New Indian Economy 3one4 Capital is targeting early-stage startups in consumer internet, SaaS, fintech, and enterprise & SMB digitization, while expanding its investments in digital health and climate tech.

Bengaluru-based venture capital firm 3one4 Capital claimed to be investing in new companies quite actively.

According to Nruthya Madappa, Partner at 3one4 Capital, "We have already made multiple investments this year and raised a new USD 200 million Fund IV in May 2023 which we will direct towards supporting the next set of generational tech leaders from India."

The firm aims to invest in pre-seed to Series A rounds with large cheque sizes ranging from between USD 0.5 million to USD 5 million. The median cheque size for these investments is in the USD 1.5 million to USD 3 million range. It's targeting early-stage startups in consumer internet, SaaS, fintech, and enterprise & SMB digitization, while expanding its investments in digital health and climate tech.

"We continue to see a very high caliber of founders building transformative companies across sectors," Madappa said. "At 3one4 Capital, we actively manage financial KPIs like burn and runway in collaboration with our founders. Regardless of the macro context, these are important factors that we continuously assist them in monitoring and taking control of. To explore and capture cost optimisation and business model efficiencies and to support our founders in helping their businesses become more resilient, we promote continuous, collaborative financial planning across our portfolio."

Madappa said that the mid- and growth-stage investments in India have slowed down in response to the financial slowdown. "Firms around the world deployed their funds at a much faster rate in 2021 and put more of their attention on portfolio management in the following year, supporting their companies in navigating the several macro shocks of 2022. By the end of 2022, several of the firms began deploying again, and this trend has continued into 2023. With multiple funds making strategic investments across sectors, early stage investing is currently on the mend."

She emphasised that recent rise in liquidity and steady rise of major tech stocks in global markets are positive indicators that a recovery is imminent, especially for a select group of reasonably priced, fundamentally sound assets across sectors. The resurgence in late stage deals will be mostly dependent on domestic IPO markets opening up to strong technology stocks in the latter half of 2023 or the early months of 2024.

Stats:

No of Startups Invested in: 113 (since inception)

No of Exits: 10 (since inception)

Focus Sectors: Consumer Internet, SaaS, Fintech, Enterprise & SMB digitization, Digital Health and Climate Tech

Fund Size: Fund IV USD 200 million, Fund III USD 200 million

AUM: Over INR 6,000 crore (USD 750 million)

Ticket Size: USD 0.5 million to USD 5 million