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India: Ankur Capital to use second fund for bigger, riskier bets

Ankur Capital plans to use its ₹300 crore fund to write bigger cheques, make riskier bets and make greater investments in successful portfolio companies, a top executive at the homegrown impact investor said. The fund, the second from Ankur Capital, is currently raising capital, following its first fund of ₹50 crore raised in 2016. “Companies’ expenses are increasing and capital needs have become higher.

Thus, we want to write bigger cheques and back our winners as they raise follow-on rounds,” Ritu Verma, co-founder and managing partner at Ankur Capital said in an interview. From the second fund, the company will write initial cheques of $500,000-$1 million, with $3 million more dedicated for follow-on rounds, Verma said. The fund’s limited partners (LPs), or investors include institutional investors and high-net worth individuals (HNIs), with about 70-80% coming from institutions. About 60% of LPs from Ankur’s first fund will return to invest in the second, Verma said.

Verma expects the fund to hit a first close of about ₹220 crore by April this year. The fund will make 20 investments, more than the 14 from its first fund, across agriculture, healthcare, and education, as well as in sectors it has not touched before, such as fintech. “Although we are a sector-agnostic fund, about 40% of our investments are in healthcare because we found good opportunities. In fintech, it is unlikely we will invest in payments, since incumbents can scale to touch underserved areas. Startups that help in saving money, or with personal finance would be interesting,” Verma said.

Ankur Capital’s investments are generally geared towards startups which cater to Tier 2 and 3 cities and beyond, either directly accessing consumers (B2C), or indirectly via businesses (B2B). “We are looking for startups that offer efficiency of last-mile delivery, and can customize for a particular segment. For instance, the agriculture tech sector has a lot of depth.

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It is huge and technology has not touched it yet. It will benefit hugely from efficiencies,” Verma added. According to Verma, the impact investing space is seeing considerable interest from angel networks as well as traditional venture capital funds, which often participate in follow-on rounds where Ankur is an early investor.

Jung Min-seo


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