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A91 Partners closes maiden fund worth $350 million

This is the largest domestic funds raised by Indian general partners so far. Last week, A91 informed its LPs in the fund that it had racked up dollar commitments of $280 million.

, ET Bureau|
Updated: May 14, 2019, 10.40 PM IST
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A91 had racked up dollar commitments of $280 million, while almost $70 million of the corpus was rupee denominated from Indian backers.
MUMBAI: A91 Partners, which was founded last year by three former Sequoia Capital managing directors, is learnt to have closed a $350 million fund, two people aware of the development said. This would be one of the largest maiden domestic funds raised by Indian general partners and is expected to invest across consumer, healthcare, financial services and technology companies.

Earlier, WestBridge Capital, Multiples PE, Kedaara Capital, Chrys Capital and Nalanda Capital had all mopped up $400 million or more for their first funds, and are counted among the most successful risk investors focused on the India market.

Last week, A91 informed its limited partners (LPs) or sponsors in the fund that it had racked up dollar commitments of $280 million, while almost $70 million of the corpus was rupee denominated from Indian backers.

The Indian backers include private life insurance companies, high-net-worth individuals, family offices and entrepreneurs. Some of its early foreign LPs include The International Finance Corporation and Asia Alternatives, with others like Adams Street and Swiss-based LGT Capital Partners also participating.

The ex-Sequoia squad of Abhay Pandey, VT Bharadwaj and Gautam Mago has backed companies like Bira, Vini Cosmetics, OYO and Prataap Snacks, among others.

While Mago left Sequoia in 2017, Bharadwaj and Pandey quit the Silicon Valley venture fund last year. When asked about the fund’s closure, A91’s Pandey did not comment citing the firm’s ongoing silent period. ET understands from people in the industry that the fund is expected to deploy as much as 65% of its capital to back consumer products and services firms, with the balance going into healthcare and financial services.

Ash Lilani, founder at Saama Capital, an early-stage consumer-focused fund, said, “There is an open space in the growth consumer investment market which they (A91 Partners) will fill given the quality of their team and approach to investing.”

The backers do not want it to be a typical venture fund, nor are they looking at the mid-market private equity space, instead tapping the Series-only ventures, people familiar with the fund’s thinking said. These are companies that will raise a single funding round in their entire life cycle.

“The idea is to back companies which are building the old school way. Indian businesses have traditionally not raised much external capital and have gone on to become profitable, which is what the fund is keen on spotting. They feel this is the bigger slice of real India than venture-backed companies, and that these founders have become increasingly equity capital aware in the last 10 years,” a person privy to the fund’s progress said.

A91 will therefore lay bets on the Series-only market and selective Series-B and -C opportunities. The Mumbai-based firm has already invested in Hector Beverages, maker of Paper Boat beverages, and cosmetic brand Sugar, and will cut cheques of $10-30 million.
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