Axilor Ventures to raise $100 million new fund

6 Jul 2022 , 01:43 PM

Axilor Ventures, an early-stage venture capital firm, said that it intends to raise a $100 million (Rs 770 crore) fund, which is nearly four times larger than its initial fund of Rs 200 crore that was introduced in 2018.

Axilor’s first fund has invested in 54 businesses during the course of its four years of operation, spanning industries including enterprise SaaS, B2B supply chain, consumer tech, fintech, and health-tech.

According to the VC business, 97 percent of its initial fund has already been invested, and the remaining 3 percent will be over the course of the following month. It anticipates receiving regulatory approvals for its new fund by the end of August.

The conversion rate from seed to Series A is among the most crucial indicators in early-stage venture capital. The median range of such agreements in India over the past five years has been 150-160 every year, with the exception of last year when they increased as a result of the investment rush, according to Ganapathy Venugopal, CEO of Axilor Ventures.

A Series A round of funding is only raised by 18% of seed-stage firms, according to data. Our portfolio has performed far better, at 48%, by that standard, he continued.

The VC company added that follow-on investment rounds had been successful for 75% of its portfolio. 30 percent of the corpus of the new fund will be put aside for investments in 10—12 winners from the previous fund.

“Since the fund has only been around for four years, it is too soon to discuss returns. On the heels of a few partial exits, 20% of the capital put through the first fund has already been returned to LPs (limited partners), according to Venugopal.

Axilor is also allocating 10% of the fund’s corpus for investments in deep tech businesses in the healthcare and life sciences industries.

Entrepreneurs in these industries frequently claim that while large sums of money are not necessary for them to develop their product and launch it into the market like their fintech or consumer tech rivals, they nonetheless seek VCs with long-term horizons who can endure a lengthy gestation period.

Additionally, the venture capital (VC) business is aligning itself with lengthier fund tenures as digital firms throughout the world continue to remain private for extended periods of time despite reaching multi-billion dollar values. Due to this, Axilor’s new fund will have a 15-year horizon instead of the 8+2-year plan.

The B2B software as a service industry is favored by the venture capital fund. Detect in the Oil & Gas industry, Leucine in the pharmaceutical area, Securtime in the productivity category, and Switchon in the manufacturing segment is just a few of the corporate firms it has sponsored within the SaaS theme.

Axilor argues that their thesis on the segment is still valid, despite the fact that US-based software giant Intuit has pulled its SMB accounting product QuickBooks from the Indian market and concerns is being voiced about SaaS companies serving the SMB category in India. In this market, it has placed bets on businesses including Urban Piper, Vyapaar, Emitrr, and Delightree. According to Venugopal, “We think that the SMB digitalization opportunity in India is in the region of $1 trillion-$1.25 trillion.”