From a USD20 million first fund in 2011, venture capital (VC) firm Blume Ventures has come a long way. Blume last raised USD290 million, its fourth fund, two years ago. One of the largest homegrown early-stage VC, Blume raised USD474 million in four funds and backed nearly 170 startups. After exits and shutdowns, it currently has an active portfolio of 70 startups that includes five unicorns and half a dozen soonicorns (soon to be unicorns).
Three weeks ago Blume put out a detailed performance report – quite unprecedented for a VC firm – of its first fund. It disclosed that it made a 6x gross return and 5x realised return. In a candid conversation with ET Prime, Karthik Reddy, co-founder and managing partner at Blume Ventures shares his thoughts on a decade-plus journey of venture investing. Edited excerpts:
How do you rate your performance in terms of returns?
I wish I could benchmark. I want to benchmark. There's nothing from that vintage available for me to benchmark. I will look at some US data. Now that I have it out there, I can ask the LP (limited partnership) universe who has global data to see how it compares internationally. The year 2024 is probably when I do a little bit of work on that, because I also want to finish the fund in its entirety and actually do USD IRR (analysis), which I do for my LP pitches. If you want to benchmark globally, you have to do USD IRR, which will be much lower because we've depreciated like crazy.
Forget about relative basis for a second, even on an absolute basis, I think we took maybe two and a half years longer than we would have liked to return the same amount of cash. That wasn't in our control because companies were just taking too long to break out. From 2011 to 2017, hardly any of these companies broke out except for one.
In terms of IRR (internal rate of return), we'll end up in the late teens, which is, you know, I would have preferred it to be in the mid-20s.
Read the Full Interview by The Economic Times Here
Karthik ReddyKarthik Reddy founded Blume with Sanjay Nath in 2011. Karthik has shaped Blume’s investment approach and philosophy over the years, and in turn has overseen investments in some of Blume’s leading portfolio companies such as…
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