Endiya Partners has hit the first close of its second venture capital fund at $40 million, Sateesh Andra, managing director of the early-stage startup investor, said over phone on Monday.
It plans to close the fund at $75 million by the end of this calendar year, said Andra.
Endiya plans to invest primarily in business-to-business (B2B) startups, including enterprise software, healthcare, information security and fintech. However, it will also selectively invest in consumer startups, Andra said.
Endiya’s portfolio includes consumer lending firm Kissht, and Binny Bansal-backed diagnostics startup SigTuple.
Most of its limited partners (LPs), or investors, from the first fund have invested in the second fund, besides a few new investors, including high net worth individuals, institutions and family offices. The capital was raised from “fund of funds, family offices, global corporates and select successful entrepreneurs”, Andra said. However, he chose not name the new investors.
Some of its existing LPs include Small Industries Development Bank of India (SIDBI) and Life Insurance Corp. (LIC).
From the new fund, Endiya will invest in 15-16 startups, with an initial cheque size of $500,000 to $1.5 million in seed/pre-Series A rounds, with planned investments of up to $5 million per company. Endiya had raised a ₹175-crore first fund in 2017.
“We want to focus more on digital health, use of artificial intelligence in healthcare, and provide solutions to diagnostics centres, hospitals and pharmaceutical companies,” said Endiya founder, Ramesh Byrapaneni, over phone. “We have the domain expertise in B2B and, hence, stick to this area,” he said.
Andra started Endiya in 2015 along with Ramesh Byrapaneni and Abhishek Srivastava. Prior to that he was a managing partner of venture capital firm Ventureast and has spent around 16 years in the Silicon Valley, mostly as an entrepreneur.
It is among a slew of early-stage venture capital funds focused on the B2B space, though it also explores other sectors. Other funds, such as pi Ventures and YourNest, invest exclusively in deep technology startups, which involves artificial intelligence, machine learning and internet of things.
Mint had reported on 24 September that pi Ventures has closed its ₹225 crore first fund. The money was raised from UK’s CDC Group and Hero Enterprise chairman Sunil Kant Munjal.
YourNest is currently investing from its ₹300-crore second fund.
Endiya’s fund-raise comes at a time when funding volumes in B2B startups have fallen over the last few quarters, even as values have risen in the last quarter. The first quarter of 2019 recorded 84 deals compared to 157 deals in the year-ago period, the lowest in five quarters, according to data-tracking platform Tracxn.
However, deal value rose from $688 million in the quarter before to $849 million for the first quarter of 2019, the second highest in six quarters. This could indicate investors writing larger cheques for fewer companies.
Endiya’s B2B focused fund also comes at a time when Tiger Global, a prolific startup investor, has been doubling down on the B2B space. In the last six months, it has invested in half a dozen B2B firms with the investments including an $89.5 million round in NinjaCart, a marketing and delivery platform for agricultural produce.
Mint first reported on April 25 that Tiger is shifting its focus to B2B, even as its celebrated private equity chief Lee Fixel, known for his early bets on Flipkart and Ola, announced his departure from Tiger in March. In the last month, it has invested in software firms Zenoti and Locus, and is in discussion with at least half a dozen other companies for an investment.
Source: Mint