Over the past decade, Vertex Ventures Southeast Asia and India have steadily invested in the Indian startup ecosystem. The country’s large working population, favourable policies, growing internet user base, and increasing consumption trends have led to an impetus in investments.
Since entering India in 2013-14, the Singapore-headquartered early-stage venture capital (VC) firm has invested in around 30 startups, with several successful exits. Notable unicorns in its portfolio include FirstCry, Licious, and Xpressbees.
Vertex Ventures has raised five funds to date, with its latest fund, Fund V, raising $541 million last year, surpassing its target of $450 million. The VC firm also operates in the US, China, and Israel. Kanika Mayar, Partner at Vertex Ventures, expressed optimism about India's potential, stating that with each successive fund, they become increasingly bullish on India. The success of some of the country’s start-ups and the bullish economy, have been some of the reasons for increased investment.
The firm aims to expand its investment scope in India by increasing the number of deals and exploring new segments. This optimism is fueled by the growing number of high-quality founders and positive economic indicators in the country. Mayar noted the maturation of the Indian startup ecosystem, with a rise in serious, long-term-focused founders.
Previously, Vertex Ventures in India focused on segments such as consumer tech, fintech, software-as-a-service (SaaS), and health tech. Now, it plans to invest in additional sectors like mobility, sustainability, and clean energy. The firm aims to replicate past successes by building scalable businesses with strong unit economics in these newer segments.
While increasing the pace of investments, Vertex Ventures intends to stick to pre-Series A and Series A stages, with ticket sizes ranging from $4-6 million per company. The firm also allocated $50 million from its fifth fund to support women-led startups, reflecting its commitment to gender diversity.
Despite challenges, such as cautious investor sentiment and rigorous due diligence, Vertex Ventures remains positive about the Indian startup ecosystem. The firm believes in backing businesses for the long term and offers a global perspective to guide startups. Mayar emphasised the mutual relationship between startup founders and investors, with both parties pitching to each other. Overall, Vertex Ventures maintains a bullish outlook on the Indian startup ecosystem and aims to stay ahead of market trends.
