Prime Venture Partners has announced its fourth fund of $100 million, with a first close of $75 million. Prime’s portfolio includes companies like MFine, Quizziz, MyGate, NiYO, Dozee, Sunstone Eduversity among others. Prime had raised its last fund of $72 million in 2018, a second fund of $46 million in 2015 and a $8 million first fund in 2012.
With this new fund, the early stage venture firm is expanding its focus areas to include decentralised finance (DeFi)/crypto, electric vehicle and gaming infrastructure platforms. Further, Prime is also actively looking to expand its leadership team by adding a fourth partner.
The investors in Prime’s fourth fund include the International Finance Corporation (IFC), part of the World Bank Group, several returning family offices and institutions, and global technology entrepreneurs across the US and South-East Asia.
Our investment numbers have gone up a bit but it still sits on the smaller side, and there's a reason for it. We believe in what we call our high conviction, high support model. So we are never going to do 40 deals a year or 50 deals a year. We are going to be very discerning, very selective in finding the companies that we decide to back.
That said, I think the velocity will increase nominally. Even from the new fund, we've already made three investments, and we're talking to another company. Another thing that we are beginning to do are small ticket pre-seed cheques. So while Seed and Pre-Series A investments will make 80 per cent of our deals. We will start doing a little bit in the pre-seed category too. But, we don't count these small cheque sizes in the six deals a year. Six deals a year will be our regular Seed investment size of $1 million to $2 million.
When do you expect the final close of the fourth fund to happen?
To be honest, we were initially looking to raise only $75 million, and it happened in the first close itself. So, now the idea is to get people who are aligned with Prime’s approach towards investing, and are also bullish on India. I would fully expect the fund to close by the end of this year.
Has the tremendous growth of the Indian start-up ecosystem in the past few months led to an increased Limited Partners interest in India?
I think that the star of India is rising. There's this very famous quote by Victor Hugo, which we have in our LP deck as well — nothing can stop an idea whose time has come — unicorn or otherwise. The number of unicorns in India have been growing in the past six months, but many of these conversations with some of the more institutional LPs can last multiple years. So everybody's been tracking India and the beauty is that India is delivering. And I don't mean just in the sense that there are unicorn companies, but in the sense that people are building real viable venture type businesses and scaling them really fast. More than unicorn valuations, some of the start-up IPOs have helped grow LPs interest in India.
Prime is adding decentralised finance (DeFi)/crypto, electric vehicle and gaming infrastructure platforms to the list of focus areas. What is your assessment of these market segments?
The reason we are adding these three sectors is because we think these are absolute mega trends for both India and the world. The new trend of decentralised finance (DeFi) is way more than just cryptocurrency, it’s about blockchain and open protocols for decentralised supply finance. We will see an interesting new class of companies in this space, who are going to jump and focus on how one can really leverage blockchain and decentralized finance as an organizing principle and technology to solve usual problems like lending and invoices counting.
Further, in the electric vehicles space, we are more focused on technology and software driven investments, rather than pure hardware side of the EV space. And likewise, in gaming, we are again looking at software plays around gaming infrastructure and any kind of infrastructure that enables gaming such as community-building around gaming, softwares to host e-sport events etc.