Alternative Investment

IFC proposes a $20 mn investment in Vertex Ventures’ India-SEA fund

IFC proposes a $20 mn investment in Vertex Ventures' India-SEA fund

Credit: 123RF.com

International Finance Corporation (IFC), the private investment arm of World Bank, has proposed a $20 million investment in Vertex Ventures’ Southeast and India-focused fund, the impact investor said in a disclosure.   

IFC has proposed an investment of $20 million into the Fund. In addition, a $20 million co-investment envelope is proposed, the statement said. 

Vertex Ventures Southeast Asia and India fund is part of Vertex Holdings’ network of global funds. It raised $305 million in its fourth fund. Last year, Reuters, citing another partner, Ben Mathias, reported that the new fund is expected to raise at least $400 million.   

Vertex Holdings, ranked as one of the biggest Southeast Asian-based funds, has $5 billion in assets under management across its funds and has about 200 active portfolio companies. The funds focus on investments in their regions of industry specialization and are run independently. 

“The fund has demonstrated success with their previous funds. Access to venture capital in India is high and in 2021 VC volumes continued to rise over four times compared to the previous year. The majority of VC volumes were driven by late-stage VC where funding rounds are significantly higher. While there is access to funding in the country, high-quality and institutional domestic fund managers who can provide quality operational advice and mentoring, especially at very early seed stages, remains limited, IFC said in a disclosure.    

IFC added, “The entire regional block still only has half the VC penetration rate of India, demonstrating that relative to the size of its economic activity, there is still potential for more venture capital to meet demand.”     

In India, Vertex Ventures aims to do three to six new deals this year as well despite concerns of a slowdown in the market. Earlier this month, it invested in Millennial Healthtech Pvt Ltd, which runs the digital clinic Proactive for Her, building on its newly incorporated healthcare thesis.    

Last year, Vertex Ventures made five new investments including Ayu Health, a hospital startup; Onato, a business-to-business (B2B) platform focused on fresh produce; and Karkhana.io, a business-to-business on-demand manufacturing platform. Notably, its existing portfolio, meat brand Licious, also achieved unicorn status last year. Unicorns are private companies that boast a valuation of at least $1 billion   

In terms of themes, the venture capital firm will continue to focus on its three core areas ― software-as-a-service (SaaS), fintech and consumer/consumer internet and a few other themes based on macro conditions.    

Vertex is also expected to fully commit its fourth fund by the end of this year and will likely strike its first cryptocurrency bet in India before raising a larger fund in 2023, It said in an interview with VCCircle.    

In 2020, Vertex Ventures got an exit from logistics company Xpressbees facilitated by a $110 million investment round led by Bahrain-based alternative investment firm Investcorp.    

In April, IFC committed at least $35 million in homegrown Motilal Oswal Private Equity’s (MOPE) fourth fund, which is sized at over $588 million (Rs 4,500 crore). IFC is set to invest up to $35 million (around Rs 268 crore), not exceeding 20% of total commitments with up to $20 million in a co-investment envelope in IBEF IV, the impact investor said in a disclosure. 

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