Exclusive: Chiratae Ventures on the verge of closing $275 million fund, ropes in IFC

Sunny Sen

Chiratae Ventures is about to close its fourth fund of $260-275 million (Rs 1,820-Rs 1,925 crore), for which it has roped in International Finance Corporation (IFC), a part of the World Bank Group, as one of the lead investors.

Chiratae (meaning leopard in Kannada) is the new avatar of IDG Ventures, which has carved out a space for itself in early-stage investing in startups through winning bets such as Myntra, Lenskart, and Firstcry.

"The fourth fund is on the verge of closure. We expect it to continue to follow the philosophy of backing startups that solve critical problems," said a person close to the development.

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Another person said IFC was one of the earliest to sign a cheque for Chiratae's fourth fund, which should signal confidence to the other investors and expedite the fourth fund's closure. IFC was an investor in Chiratae's third fund, too.

Also, the second source says that with the money from IFC and some of the other investors that has flowed in, Chiratae will soon start disbursing money to startups that it has decided to fund.

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Chiratae's fund-raising comes close on the heels of news that Accel Partners (which backed Flipkart) is on the road to raise about $700 million. Sequoia last year closed its sixth fund for India and southeast Asia at $675 million, and is look to further bolster it with $200 million.

The former IDG Ventures launched its first fund in 2007 with a corpus of $150 million. Its second fund totalled $95 million, and the third fund was worth $208 million. Apart from IFC and Small Industries Development Bank of India, which were the large investors, the third fund had close to 70 LPs (limited partners)."

IFC is believed to have invested about $25 million, making it one of the lead investors in the fund. "This also helps IFC to widen its portfolio and invest into many more startups through another fund, rather than making investments in individual startups," said the second source.

IFC and Chiratae Ventures did not respond to queries.

Chiratae's investment mantra is to start investing in a startup with seed capital, and follow up with investments when the startup gets into the expansion phase. The fund's areas of interests are consumer media and technology, software, health-tech and fintech.

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Also See: Myntra logs Rs 539.2 cr loss in FY19; revenue from operations more than doubled to Rs 1,041 cr

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