Investment

Gemba Capital Launches Second Fund of INR 250 Crore to Invest in ‘Platform-First’ Businesses

• ByStartupStory     |    July 30, 2024

Gemba Capital, a leading Sebi-registered Micro VC in India, has announced the launch of its second fund with a corpus of INR 250 crore, including a green shoe option of INR 50 crore. This new fund aims to invest in approximately 30 early-stage ‘Platform-first’ businesses over the next three years.

Fund-II will focus on three key sectors: Fintech, Consumer Tech, and B2B Platforms. The fund will provide initial investments of INR 5 crore, with a reserve ratio of around 30% for follow-on investments. Digital “Platform-first” businesses, which can create compounding moats through ecosystem creation, network effects, or the ability to stack value-add layers, will be the primary targets for investment.

Gemba Capital, founded in 2018, has established itself as a high-conviction, thesis-led investor. The firm’s first fund, launched in 2022 with a corpus of INR 70 crore, had an average cheque size of INR 2 crore. Fund I was raised through investments from family offices, founders, and CXOs. Gemba Capital has consistently invested in pre-seed and seed rounds, focusing on fewer than 10 deals a year and adding significant value to its portfolio companies. The firm has developed a proprietary ‘Founder Market Fit Framework’ to identify the right teams to support.

Commenting on the announcement, Adith Podhar, General Partner at Gemba Capital, said, “Our journey has evolved from investing proprietary capital to running an angel syndicate and then raising and investing from our INR 70 crore Fund-I. We are now looking to partner with institutional LPs for our INR 250 crore Fund-II. The Indian early-stage startup ecosystem needs more institutional capital to be deployed through Single-Stage VC funds like us.”

Govind Lohia, Principal at Gemba Capital, added, “We are one of the leading institutional micro-VC funds in India at the seed stage and we remain committed to being a seed investor. Founders recognize the immense value we bring to the cap-table, which sets us apart. The fund has supported its portfolio companies in multiple areas, including customer introductions, fundraising, and strategic planning.”

Emerging VC fund managers in India face a challenging fundraising environment, but those who implement robust processes and maintain a disciplined portfolio construct will always attract capital. Gemba Capital has a solid performance track record with successful exits and up rounds. The firm is targeting to achieve the final close of Fund-II by the end of the year.

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