Jhunjhunwala invests in Exfinity's second fund to bet on startups

Billionaire investor Rakesh Jhunjhunwala, who made his fortune through stock bets, has taken a step towards investing in tech startups by joining as a limited partner of the Rs 250 crore second fund being raised by Exfinity Venture Partners, the VC firm run by former Infosys board members V Balakrishnan and TV Mohandas Pai; former Wipro CEO Girish Paranjpe and former i-flex top executive Deepak Ghaisas.

A source aware of the development confirmed that Jhunjhunwala through his firm Rare Enterprises has put in Rs 12.5 crore in the Exfinity fund which will focus on startups in the enterprise IT space.

Jhunjhunwala did not respond to an email and a phone call while Balakrishnan, chairman of Exfinity Venture Partners, said the firm is not in a position to disclose the names of its limited partners.

With stock market remaining volatile and returns from other asset classes such as real estate and gold are declining, a rising number of high-net-worth individuals are looking to invest in startups. Rather than directly investing in startups, they prefer to invest through tech-focused funds. Jhunjhunwala preferred to invest in Exfinity for its exclusive focus on B2B tech startups, according to The Economic Times which first reported the development.

Exfinity had launched its Rs 125 crore first fund last year and invested in about half a dozen companies. The firm raised capital from around 70 investors for its first fund. In an earlier interaction Balakrishnan told VCCircle that Exfinity would look at investing in Series A, B and C rounds from its upcoming bigger second fund.

Exfinity currently invests $1-2 million (Rs 6.5-13 crore) and plans to increase its ticket size once it closes the second fund early next year.

The new fund got SEBI approval in July and is expected to see more participation from institutional investors. It has got the backing of SIDBI Ventures and SBI.

Exfinity is also launching a $125 million offshore fund based in Mauritius.