Orios Venture Partners has raised $30 million to back fund's best performers

CIOReviewIndia Team | Friday, 25 June 2021, 03:42 IST

Orios Venture Partners has raised $30 million to back fund's best performersSeed-stage investment firm Orios Venture Partners has raised $30 million in additional capital to exclusively back its high-growth, standout portfolio companies.

This is a trend now widely seen among small-size domestic early venture capital funds.

Called Select Fund I, Orios has followed other domestic investors like Blume Ventures and India Quotient in racking up an “Opportunities Fund” to keep its shareholding from getting diluted as companies raise capital at steep valuations in large financing rounds.

Mumbai-based Orios is also expected to hit the market soon for raising a $80-$100 million third fund, founder and managing partner Rehan Yar Khan told in an interview.

“The Limited Partners (LPs) or sponsors for Select Fund I are the same as our previous two funds. Typically, Opportunities Funds have the same investors because they have backed the companies in the portfolio. These are companies we want to double down on. In fact, we have started disbursing the capital already, it is nearly exhausted keeping in mind the super active market,” Khan said.

The last two funds from Orios were both Rs 300 crore in size, having invested in companies like the IPO-bound online pharmacy startup PharmEasy, and GoMechanic, a car servicing platform that said, it had raised $42 million led by Tiger Global.

Orios’ Select Fund I will plough between $4 million and $8 million as follow-on investments in existing portfolio companies along with taking bets on late stage to pre-IPO ventures like the one made in gaming platform Nazara Technologies and digital payments company Mobikwik.

So far, the fund has invested in Series D & E rounds of PharmEasy, Series B & C rounds of direct-to-consumer brand Country Delight and the Series C round of GoMechanic.

The firm’s portfolio companies also include gaming company Zupee, agritech company Krishify, digital health company Beato, retail tech company Gully Network, fintech company MoneyOnClick, and EV-battery-as-a-service company Battery Smart.

The latest capital raise comes at a time when seed-stage funds face increased competition from bigger venture capital firms like Sequoia Capital's Surge, other VC firms, as well the likes of Silicon Valley’s Y Combinator, which has been hitting new records with an increasing number of Indian startups in each batch.

After having a prolific stint as an angel investor and picking startups like ride-hailing company Ola and Software-as-a-Service firm Druva, which are now billion-dollar enterprises, Khan launched his maiden fund in 2014.

However, his next fund was not an easy one to raise with no big winners to show.

One of its big cheques from Fund I was budget hotel Zo Rooms, which has been in a years-long legal tussle with SoftBank-backed Oyo.

Earlier this year, an arbitrator appointed by the Supreme Court ruled that Oyo was in breach of its agreement with smaller rival Zo Rooms in relation to its planned acquisition.

Zo had claimed it is entitled to a 7% stake in Oyo’s parent, Oravel Stays.

The matter has yet to be officially closed.

Khan said it is looking to enforce the arbitrator’s ruling.

Oyo has said it has not been directed to issue any shares to Zo.

Orios is now banking on PharmEasy's imminent IPO, which Khan said is expected to snag a huge return and will rank among the best for a rupee-denominated fund.

“We have a sizable ownership in PharmEasy. The IPO will be a really big outcome for us, a banner moment. We will sell our entire stake. Then there is Country Delight which we would look to liquidate sometime during the end of next year,” he added.

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