Early-stage venture capital fund 8i Ventures, which focuses on fintech & commerce sectors, on Thursday announced the first close of its $50-million second fund. The fund has already met 50% of its targeted AUM and achieved the first close of $25 million, raised largely from family offices like Salgaocars and Kothari (DSP) who were also invested in 8i Venture’s first fund.
Founded in 2019 by Vikram Chachra & Vishwanath V, 8i Ventures and its partners have backed more than 50 seed to early-stage start-ups that have created more than $4 billion of value for their shareholders in India and globally. These include brands like Slice, Kodo, Blue Tokai and Carwale.com (NSE: CARTRADE) in addition to fintech enablers such as M2P, Signzy, Easebuzz, Bharat-x and EzeTap.
The firm scored a sizeable exit in India in April this year, when it partially exited a seed investment in its portfolio company – M2P, at a 36X multiple over a two-year timeline.
Speaking with FE, 8i Ventures’ general partner Vishwanath V said that the first close of $25 million was anchored by returning limited partners from the first fund, along with a few new family offices in India and Singapore.
“Our fund-1 IRR is at 100% which puts us on the top of the list of funds in this region. Since IRR is relevant only over the lifecycles of the fund (7+y), it doesn’t really matter in lean periods like this. We have ensured that our portfolio companies are funded for 24 months so that they don’t have to go out and raise money on unfavourable terms,” he said.
Vishwanath also said that collectively, 8i Ventures’ Fund I portfolio companies already process $18 billion of payments annually, while generating $100 million in gross profits, between them. For Fund II, the VC firm will follow the same thesis, but with larger ownership across its new investments. The fund will look to invest seed capital in companies with an average cheque size of $1.5 million to $2 million, going up to $10 million across subsequent rounds.
Vikram Chachra, founding partner of 8i Ventures, added that India’s fintech segment is still the single-largest venture opportunity since every single friction point in the country’s financial economy is a potential billion-dollar startup opportunity. “Our key insight when we launched Fund I, was that consumer payments and commerce is a trillion-dollar opportunity. Since then, digital payments have swelled from US$200 billion a year to US$720 billion now. With Fund II, we have an added focus on B2B fintech and commerce – which we believe to be the next trillion-dollar market in India,” Chachra added.
The founder partners at 8i are ex-operators with an established track record of seeding category winners across fintech and consumer sectors. The firm’s first fund is up 270% with a 100% IRR in 3 years, driven by early-stage investments in large startups like Slice, M2P and Blue Tokai. It has already returned 27% of its capital back to investors.