Early Stage VC Firm, 3one4 Capital, Completes $200 Mn Close for Fund IV to Back Startups

• ByStartupStory     |    May 8, 2023

3one4 Capital, a venture capital startup based in Bengaluru, has announced the closure of its fourth early-stage investment fund, Fund IV, raising $200 million. The firm will be investing in startups at their initial stages, with a focus on larger cheque sizes ranging from pre-seed to Series A, offering investments ranging from $0.5 million to $5 million. The median cheque size for these investments will be in the range of $1.5 million to $3 million. Additionally, the VC firm is also looking to explore potential post-seed and Pre-Series A funding rounds.

The VC firm has declared that it will concentrate on consumer internet, fintech, and SaaS sectors, along with expanding investments in emerging areas like climate tech and healthtech. The firm has announced that it has completed its first close in March 2023 and has already approved or invested in five deals. The final close is anticipated to take place by the end of Q1FY24, as per the statement released by the VC firm.

The VC firm announced that its fourth early stage fund, Fund IV, garnered great interest, resulting in oversubscription within just 2.5 months of its launch to $250 Mn. Despite this, the firm decided not to increase the fund’s size to match the demand, and instead closed it at the original target amount. The statement released by the firm revealed that 90% of the investors in Fund IV were institutional investors, including several notable banks, mutual fund operators, university endowments, global corporations, and insurance companies. Additionally, the fund also saw investments from Indian corporations and a range of family offices.

3one4 Capital’s partner, CFO, and ESG officer, Siddarth Pai, stated that the VC firm takes a proactive approach to investing in durable technological assets that can meet future needs and support early standard-setting. Pai also believes that India can lead the way in establishing a new technological development paradigm by adopting global consensus frameworks such as SDGs and ESG. The VC firm has also recently promoted Nruthya Madappa to partner. With over 60 successful investments, including unicorns like Licious and Open, soonicorns such as Jupiter, Yulu, and Kuku FM, as well as notable companies like Koo, Pazcare, Growfin, ePlane.ai, BetterPlace, and Breathe Well-Being, 3one4 Capital continues to make a significant impact in the startup ecosystem.

The recent fund close at 3one4 Capital coincides with a period of high activity for investors in India, who have either announced, launched or closed funds totaling almost $3 Bn since the beginning of 2023, according to data compiled by Inc42. Notable examples include Multiples PE’s $640 Mn fund close, Chiratae Ventures’ Growth Fund I close at INR 1,001 Cr (approximately $123 Mn), and Capria Ventures’ first close of its $100 Mn fund. Despite this, the Indian startup ecosystem has been experiencing a funding downturn, with just $888 Mn raised in April 2023 – a 66% drop from the $2.6 Bn raised in April of the previous year, according to Inc42 data.

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