3one4 Capital launches third early-stage fund with $100 mn target corpus

Venture capital firm 3one4 Capital has launched its third early-stage VC fund ‘Fund III’ with a target corpus of $100 million (Rs 750 crore).

The new fund takes the Bengaluru-based VC firm’s capital under management to over $210 million (Rs 1,550 crore).

3one4 Capital has already received commitments of over 40% of its targeted corpus from new and existing investors, according to a statement. These investors include family offices, endowments, foundations, as well as corporate and financial institutional investors.

Fund III will back 25-30 early-stage startups with a focus on SaaS (software as a service) and enterprise automation, direct-to-consumer, media and content, fintech, and deep technology. The fund will cover sectors such as health, machine-driven intelligent services, edtech, agritech, logistics and distribution, foodtech, mobility, and Indic language-focused applications.

With a ticket size range of $500,000-$4 million, the fund will have an active focus on follow-on investments into later stages.

“Our investor base now combines an intellectually-diverse and globally-positioned pool of resources that provide a consistent competitive edge to the firm and its portfolio companies. By deepening our access to strategic corporations and investors, we can now direct more meaningful capital through the firm’s bottoms-up selection routines to discover the next set of generational tech companies from India,” Pranav Pai, managing partner, 3one4 Capital said.

3one4 Capital founders and brothers Siddarth and Pranav Pai initially followed in the footsteps of their father, former Infosys CFO and board member TV Mohandas Pai, and started as angel investors back in 2013. They went the venture capital way in 2016  when they launched their first fund, 3one4 Capital Fund I, with a modest $14 million corpus. Subsequently, they raised a $35 million second fund, 3one4 Capital Fund II, in 2017.

The firm had around $110 million (Rs 800 crore) of capital under management across its four funds so far -- two early-stage funds, a dedicated seed fund named Rising I, and a dedicated opportunity fund called Continuum I.

The new fund announcement comes less than a year after it raised $118.5 million across Rising-I and Continuum-I. 

Continuum-I raised $56 million in its final close, higher than its targeted $50 million. The fund had raised $21 million as part of its close in February last year. Rising-I was also oversubscribed, closing at $6.5 million against the targeted $3.5 million.

Its portfolio of investments includes meat etailer Licious; online human resources firms Betterplace and DarwinBox, redit marketplace Faircent; health-tech startup Bugworks; entertainment firm Pocket Aces; fintech firms Open,, LoanTap, and Jupiter; edtech startup Uable; and e-mobility startup Yulu.