Bengaluru: Prime Venture Partners, which has backed Indian startups such as MyGate and Niyo, has launched its fifth fund with a size of $100 million to continue investing in early-stage companies across sectors.
The development comes almost four years after it raised $100 million for its fourth fund, which was later oversubscribed to $120 million. While there is strong demand for the new fund, which may also be oversubscribed, this range is the preferred fund size, co-founder and managing partner Sanjay Swamy told Mint in an interview.
“This is the right cruising altitude for an early-stage fund in India and that is what we are focused on,” Swamy said on retaining the fund size. The previous fund sizes were $72 million (raised in 2018), $46 million (2015) and $8 million (2012).
Last year, Mint reported that venture capital firms including Stellaris Venture Partners and Blume Ventures adopted a similar strategy of retaining their fund sizes as investors took a more measured approach, reflecting the investable opportunities.
This also underscores the tempered expectations from Indian startups as venture capital firms sit on sizable dry powder—capital yet to be deployed—having become more diligent on which entities to back.
Prime’s first fund has been fully returned to limited partners at a multiple of 4x+ and the subsequent funds also expect top decile returns, driven by exits through initial public offerings and mergers and acquisitions, Swamy said, without disclosing exact figures.
European interest
So far, the firm has exited investments in Happay (acquired by Cred), Recko (Stripe), Perpule (Amazon) and Ezetap (Razorpay), and Tracxn after its IPO. With IPO candidates Niyo and MyGate, it is open to evaluating secondaries as a strategy across its portfolio companies for interim liquidity, according to Swamy.
The new fund has already received 80% of the capital from global institutional investors including family offices, university endowments, and fund-of-funds from the US, Singapore, Europe and the Middle East.
“This time around, we are seeing more active interest from European LPs, underscoring the fact that India is becoming more important for them as well,” Swamy said.
While Prime is actively investing out of its Fund IV, Fund V is set to begin deployment in the second half of 2025. The VC firm has strategically increased its first cheque size to $2-4 million over the years from $500,000.
The new fund, which plans to invest in 16-18 companies, will continue focusing on early-stage companies, particularly in the pre-Series A category, and will deepen its focus in fintech, AI/deeptech, global SaaS and digital India. The investment firm may also evaluate companies at the idea stage, based on the founders’ backing and their understanding of the market, Swamy said.
“There are several newer areas that are emerging within these categories. We are also evaluating other opportunities that come out of distribution channels like quick commerce in terms of logistics, warehousing, new software stacks and other similar infrastructure capabilities,” he added.
Founded in 2012 by Swamy and Shripati Acharya, the firm has backed over 50 Indian early-stage startups including WheelsEye, MyGate, Quizizz, PlanetSpark, Dozee, and Zuper. To date, it has about $300 million in assets under management, according to its website.
