Venture capital firm India Quotient is aiming to raise $130 million for its fifth fund, with nearly 80% of the commitments anticipated to come from global investors, according to founding partner Anand Lunia. This represents a shift from previous funds, which primarily sourced capital from domestic investors. Lunia noted that Indian investors often seek quicker exits due to their past experiences with funds, and there is pressure to match the strong returns seen in public markets. As a result, the firm is now pivoting to attract more interest from international backers.
India Quotient has recently partially exited several portfolio companies, including Vyapar, Sugar Cosmetics, and Giva, to generate liquidity. To date, it has returned approximately ₹600 crore from the ₹1,600 crore raised across its four funds. The first fund achieved a return multiple of 5.9x, while the second fund has returned 1.5x so far and is projected to reach nearly 6x through secondary sales in ShareChat and Sugar Cosmetics. The third fund has returned 35% of the capital raised thus far.
The firm’s previous funds were sized at $109 million (2021), $64 million (2018), $20 million (2015), and $6 million (2013). Lunia expressed a preference for raising smaller funds to invest in early-stage companies addressing significant challenges, emphasizing that larger funds are not conducive to making seed investments.
The new fund, which is set to be the largest to date, is expected to close by mid-year and will continue to support early-stage companies focused on solving issues for populations outside major metropolitan areas. While the firm has been sector-agnostic, it plans to increase its focus on sectors such as edtech, consumer goods, software, and digital engagement.
