Blume Ventures, in partnership with Avendus, launched and closed a first-of-its-kind product for Indian investors in late 2020. The INR 300 crore target fund is now closed at INR 350 crores, and was oversubscribed. The recently closed secondaries fund, named Blume Ventures Fund 1X, was designed to allow interested new investors, existing Blume Fund I and allied entities’ investors, to hold the top performers in Fund I for an additional 4-5 years.
Secondary structures are common as fund lives reach their natural limits. Historically, buyers in such funds have been Offshore Institutional investors, who specialize in taking risk of this nature. The challenges of a COVID year allowed for innovation onshore. Avendus also saw merit in the opportunity and built an exclusive product for its wealth customers.
Six of the Blume I portfolio companies were packaged into a portfolio and their positions are being acquired by the new fund, Fund 1X. The companies are three of the biggest stars in Fund I – GreyOrange, Purplle, and Turtlemint, and three growing B2B stars – Exotel, IDfy, and WebEngage.
“We are excited with this new fund and continue the journey with some of the best of our founders in Fund I and IA, whilst ensuring that we were able to deliver meaningful returns to our investors, net of all fees and expenses. We continue to be in further discussions for the select assets including global-first innovation businesses and those targeting the Indian consumer from the remainder of the portfolio to be part of another similar portfolio basket”, says Ashish Fafadia, Partner, Blume Ventures, who led the effort for Blume Ventures.
Karthik Reddy, Founding Partner, Blume Ventures added, “We believed that the capital markets were harsh to some of our best Fund I founders (pre-2015 era) and we wanted to back them further as they begin to shoot up to their true potential. In Avendus, we found a willing partner to structure this. We are excited and hope to see 4-5x growth in each of the portfolio companies from here in a short 4-5 year period.”
“We congratulate Blume on executing this innovative, exclusive and jointly developed idea. At Avendus Wealth Management, we believe in crafting cutting edge solutions for our clients, while supporting the wealth creation ecosystem around us. There is tremendous potential in our country as Wealth Creators get savvy and demand solutions that are differentiated and on par with global offerings,” says Nitin Singh, MD & CEO, Avendus Wealth Management.
Arvind Bansal, Executive Director and Head, Products and Advisory at Avendus Wealth Management says, “For over a decade, our firm has been providing unique opportunities to our clients. This product by Blume is a significant step in our journey to make digital & tech equity a mainstream asset class for domestic investors.”
This fund allows Blume’s Fund 1 and Fund 1A investors to see gross cash returns of over 2x while they can still expect an additional 1-2x from the residual positions that were not a part of this secondary portfolio.
Blume Ventures, which completed a decade of early-stage venture investing this quarter, has consistently innovated over the decade as it tries to match the needs of both investors and entrepreneurs. On the capital front, Blume has done Opportunity Funds, SPVs and now, this pioneering Secondaries Fund. Evolving with its growth portfolio, Blume has solved for investors and portfolio companies’ needs rapidly.
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