3one4 Capital, a venture capital firm based in India, recently completed a roadshow to raise its fourth marquee fund. Despite a worsening global economy, the firm managed to secure $200 million in just two and a half months. Among its portfolio are four unicorn startups.
The Bengaluru-headquartered firm’s sixth overall fund was oversubscribed at $250 million, but 3one4 Capital chose to cap it at $200 million to maintain a lean and disciplined approach, according to Pranav Pai, co-founder and partner at the firm. This decision reflects the strategic choices that differentiate 3one4 Capital from other Indian venture firms.
In an interview with TechCrunch, Pai stated, “We are known to give good returns. Our performance has been benchmarked among the best leading performing funds in the space. So we asked ourselves the hard questions, can we continue our performance with a larger fund size? Do we even need that much capital for the early-stage?”
As large funds emerge in India’s venture capital landscape, concerns arise about responsible capital allocation, particularly for early-stage startups. Critics question whether the Indian market can support and effectively utilize such substantial investments. Pai believes there is significant potential for more Indian companies to pursue IPOs, given the nation’s successful and well-regulated IPO market for institutional investors. He expects India’s stock index to evolve with a growing number of tech companies, apps, services, fintech, and payment solutions.
3one4 Capital, which primarily focuses on early-stage investments in sectors such as direct-to-consumer tech, media and content, fintech, deep technology, and SaaS and enterprise automation, currently manages around $750 million in assets under management. Its portfolio includes HR platform Darwinbox, B2B-focused neobank Open, consumer-focused neobank Jupiter, direct-to-consumer meat brand Licious, local social networks Koo and Lokal, entertainment service Kuku FM, fintech Raise Financial, and gaming company Loco.
The firm’s contrarian investment approach, illustrated by its early investment in Licious, has contributed to its reputation. Despite initial skepticism about India’s price-sensitive market supporting online meat delivery, Licious has grown into one of South Asia’s largest direct-to-consumer brands, operating in roughly two dozen cities across India.