This is the formal Press Release that we issued today announcing the final close of FundIII.
Accompanying picture issued with the Press Release.
India’s leading homegrown early-stage venture capital firm, Blume Ventures, has announced the final close of Blume Ventures Fund III at US $102 million. After a first close in late 2018, the final close was completed in December 2019. Blume started in 2011 raising an entirely domestic 100cr fund from HNIs; subsequently it raised a $60m fund (Rs ~400crs) in 2016, and now a third fund of $102m (Rs ~715crs). In the 15 year old VC industry, Blume becomes the first entirely homegrown fund to raise a third fund and raise over a $100 million in a single fund.
Blume has also pioneered a distinct approach amongst venture firms in India, building out a strong platform team delivering services to founders including hiring, fundraising, business development, founder learning & development etc. With a combination of brand offerings that include Constellation Blu (financial and legal spinoff), Passion Connect (talent acquisition spinoff), Arka (B2B x-border accelerator JV with US funds) and Blu Swan (internal Growth capital advisory), Blume has delivered on value to portfolio that very few early stage funds can match.
Blume’s newest fund will continue to back early stage startups focusing on the two distinct opportunity sets that India offers, opportunities that leverage the mobile-led explosion of the Indian digital-first economy, and Indian engineering and science translated to global market opportunities.
Blume had marked the first close of Fund III at $45 Million in October 2018, which has helped build the first half of the Fund III portfolio. The early Fund III portfolio construction over the first year has crossed 10 investments. The domestic market opportunity has been invested into through India-centric sectors such as healthcare (HealthAssure), consumer (Taaraka, Stage3), agri(Jai Kisan, TartanSense, Procol), and the education-to-talent spectrum (Classplus, Tapchief, LeverageEdu). Deep-tech and Global Market Tech plays such as AgaraLabs, Lambda Test, Ethereal Machines and Euler Motors round up the rest of the early portfolio to date.
Fund III saw continued support from Blume’s current LPs as well as new institutional investors from global markets. Fund I and II continue to trend positively with a multitude of growth stage breakouts in the portfolio over the last 24 months (Unacademy, Grey Orange, Spinny, Turtlemint, Dunzo, Healthifyme, Purplle, Railyatri (IntrCity) and more) as well as exits such as Mettl, NowFloats, Threadsol and Minjar. These hits, along with Blume’s maximal reach amongst the early stage startup base has helped Blume further expand its investor base base to further high quality investors.
“We are very proud of our founders and team who have delivered outstanding performance over the last 3 years thereby strengthening the Blume brand and track record immensely. Our existing backers have reposed continued faith in our ability to back, nurture and build sustainable and exciting businesses. Their support has gotten us this far and inspired a new set of world-class institutional investors who have partnered with us in 2019, to help us build the next decade at Blume”, said Karthik Reddy, co-founder and Managing Partner at Blume Ventures.
Sanjay Nath, co-founder and Managing Partner, added “Sectorally, we’ve broadened our ‘built in India for global markets’ B2B thesis. Thanks to a rise in the quality and availability of talent in leading edge technologies like AI/ML, we’ve expanded our investment team resources to cover Enterprise Software/SaaS as well as space/drones, robotics, core sciences and other deep tech areas. With Fund III, Blume continues to strengthen its global investment partnerships. In addition to being a Draper Venture Network (DVN) member fund and co-founding Arka Venture Labs (one of India’s first b2b x-border accelerator funds), we also set up a R&D investment program ‘BUDHA’ with our Japanese strategic partner UTEC, to seed the next wave of innovation in deep/hard tech”.
Ashish Fafadia, who has been at Blume since 2012, and was added to the Partnership in Fund III, adds “Fund III allows us to invest with more capital and ownership per company. With breakouts from Funds I and II companies allowing Blume to grow with their portfolio, investing through an Opportunities Fund through Series B/C/D rounds in these companies has added a Growth lens to the team. We are adding senior resources both on the investment side as well on the platform side which has been a pioneering effort of sorts in the Indian early stage tech ecosystem.”
This fund has also allowed Blume to expand its ambition and presence with offices in Delhi and Bangalore over the last 18 months which have rapidly scaled to teams of 5 members each. The Delhi office, led by Arpit Agarwal and Sajith Pai, and the Bangalore office anchored by Sarita Raichura, round out our presence in the the three big hubs of startup activity in India giving us the ability to source, support and manage portfolios across these hubs.
Fund III will be invested across 25-30 companies. With opening investment cheques of $500K-$1.25M, and reserves per winning company running into $3-5 million, Blume is now signalling larger ownership needs, and a longer & deeper commitment to winners from the portfolio. This belief is being further played out with an Opportunity Fund, that was raised only for Fund I and II winners.
Since 2011, Blume has bridged the gap between local angel networks and larger venture capital firms with an institutionalised approach. It follows up funding with active mentoring and a wide range of platform services such as fundraising, hiring, business development, learning etc. Over the past near-decade it has invested in over 100 startups across various facets of technology sticking to an approximate 60:40 portfolio ratio consistently of the domestic and global market opportunities.