Founded in 2019 by entrepreneur and angel investor Vikram Chachra along with Vishwanath V, 8i Ventures has backed seven early-stage startups from its maiden $13 million Fund-I.
The firm’s fintech bets, like Slice, a credit-card issuing startup; M2P, a card-issuing platform, and Difenz, a digital risk and fraud management firm, have performed well.
In fact, last week,
Slice said it had raised $220 million from Tiger Global and Insight Partners, among others, as its valuation topped $1 billion.
8i had first invested in Slice earlier this year, when it was valued at $200 million, and is sitting on a 7.4X paper gain clocked in less than six months of investment.
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The firm has also backed consumer brands like Blue Tokai Coffee and Bbetter, an Indian supplements brand.
“8i’s Fund-I is clocking a multiple of 4.2 times on the capital we have drawn down, and 5.6 times on the investments we have made from the fund, over the last two years,” Chachra told ET. “We raised our fund in 2020-2021 and expect to return around 25% of the fund assets under management (AUM) by the end of FY22. We should be able to return the entire fund by FY23.”
Chachra said the fund expects to deliver a return multiple that will put 8i in the top 5-10% of all global VC funds.
8i expects to make its first close of $25 million for Fund-II by the first quarter of next year from existing and new Limited Partners (LPs), or sponsors in an investment fund.
Fund I, which it raised from prominent angels and Indian family offices like the DSP group, delivered an Internal Rate of Return (IRR) of 110% and a return on invested capital of three times.
A majority of investments made by the fund is in the range of $1-$1.5 million in the seed stage, as well as through follow-on investments in Series A and B rounds.
With the new fund, the VC expects the cheque sizes to go up to $5 million, depending on the growth stage and maturity of the companies.
“With the new fund, we will be able to seed and co-lead Series A while maintaining our pro-rata in winners. When you have a tiny fund you run out of money to maintain your ownership as a company progresses,” he said.
Other seed-stage funds in India include 9Unicorns, which recently said it had closed its first accelerator at $40 million (about Rs 298 crore) in April.
It invests in various sectors including Deep Tech, B2B SaaS, media, FMCG, fintech. based founder, Vaibhav Domkundwar, closed its early-stage fund of $15.2 million last month and Blume Ventures, one of the largest early-stage funds in India, raised $105 million in the first close of its fourth fund in November.
Others like Venture Highway, a tech-focused early-stage investment firm, raised about $79 million (about Rs 560 crore) for its second fund last year, as funds increase their corpus to compete with bigger players like Sequoia Capital, Y Combinator, Accel and other traditional VCs which want to catch startups at the seed-stage to maximise returns.
