Venture capital firm Orios Venture Partners, which has backed Pharmeasy, Country Delight, and Battery Smart, among other notable start-ups, now eyes more diverse sectors including clean tech, climate, and business-to-business (B2B) for its fourth fund. Sukhmani Bedi, partner at the firm, unpacks the VC’s investment approach and the funding momentum in the start-up ecosystem. Edited excerpts from the interview.
What is your investment approach?
Orios Venture Partners has been in existence since 2013. We are currently on our fourth fund, which is nearing completion at ₹150 million. Orios is a sector-agnostic fund, and looks at all technology-enabled sectors. We enter at a second stage or Pre-A round in companies that have had at least a six- to 12-month traction, with average cheque size of $2-5 million. We prefer to lead but have also co-invested. Our portfolio currently has 30-35 active companies, and we have taken partial exits in several companies. Multiple routes — exit-upround [fund raise at a higher valuation], IPO [initial public offering], acquisition, or selling secondaries to co-investors — all interest us.
Which are the newer sectors piquing your interest?
So far we have investments in the creator economy, derivatives crypto exchange, life and health insurance, marketplace for fixed income products, and climate tech. Going forward, we will be doubling down on clean tech and climate investments. Circular economy is another interesting area. Given that waste management and recycling are manual-oriented in India, if a company can use technology to reduce manual intervention and extract good margins in the process, that would be of interest to us. Another big space we are looking at is B2B, which is a $150-billion market. We are looking at cross-border, building on the China+1 strategy. Even in edtech, where we think interesting developments are on, we are looking at B2B players.
Is the funding winter ending? Is the funding momentum picking up again?
There has been an uptick in venture activity in the last quarter, and we expect this to continue, and improve more in 2024. Although venture activity will increase, it will probably not touch 2021-22 levels, as some course correction has happened. A lot of IPOs, too, are set to happen, hence from a VC ecosystem perspective it will be a better year.
In the aftermath of the alleged fund diversion at GoMechanic, what safeguards has your fund introduced?
With over a decade in fund operation, encountering certain occurrences is part of the fund manager’s journey. Hence, one will correct for it but also ensure not to overdo it and instead strike a fine balance between ensuring they aren’t overwhelmed by numerous audits while safeguarding the interests of the limited partners (LPs). Consequently, there’s been an increase in audits and checks and balances. Upholding trust is fundamental in this business, assuming that most founders act in good faith.
How has the exit of two managing partners impacted the fund?
High-level exits happen at all companies, across sectors. It is a significant change. Having said that, the fund already had depth in the investment team. In terms of our fundraising targets, further investments, and planned exits, nothing much has changed.