Bengaluru: Silicon Valley-based Indian entrepreneur and investor Amit Rathore and two other US-based investors are launching two new funds with a combined corpus of about $244 million to invest in early-stage and late-stage technology ventures in countries including the US and India.
Rathore, the founder of Silicon Valley-based digital publishing start-up Quintype, has launched a small-scale venture-capital firm along with Gunther Sonnenfeld and Andrew Markell called Higher Order VC, which is launching the two new funds.
Raghav Bahl, founder of Quintillion Media Pvt. Ltd, was an early investor in Quintype.
In an interview, Rathore said the funds “should be closed by July”, having received a majority of commitments from limited partners (LPs) for both the funds, called Return Capital I and II, which will invest in tech-based ventures, in areas including data analytics, digital media and technology products. Higher Order VC will also have other partners based out of London, Hong Kong and India managing the funds.
“The first fund will mostly invest in early-stage firms and when these start-ups start to raise their next round, we would like to keep our percentage or double down, which will come from the second fund. If the ideas are growing fast, we’ll invest from the second fund,” said Rathore, adding that he funds were ready to be deployed and would soon start investing in early-stage ventures.
“These two funds are going to invest in early-stage and late-stage ventures. It will be a data-driven funnel of funds,” added Rathore.
Return Capital I and II will aim to crunch the time it takes for early-stage ventures to scale up, said Rathore. “We believe that the time-cycle of average start-ups should go down from seven years to perhaps five years or four years in this Internet age. We want to use data to potentially increase returns in venture capital,” he said, adding that the ticket sizes of each deal will not be very large.
“We won’t be doing $10-20 million rounds anytime soon,” he added. One of the areas that Rathore want to bet big on is digital media.
“Media has been our focus—I’m very passionate about journalism,” he said.
The launch of the two new funds comes at a time when the global funding environment is witnessing a significant uptick, especially in the backdrop of SoftBank’s latest mammoth $100-billion Vision Fund—which has, in turn, already triggered concerns of a potential bubble being created by large funding rounds that are being led by the Japanese investment giant.
The Indian start-up ecosystem has also seen its share of large funding rounds already this year, with both Flipkart and Paytm having raised $1.4 billion each from blue-chip investors such as Tencent Holdings and SoftBank, among others.
Rathore’s start-up Quintype had raised $3.25 million in 2015 by investors led by Raghav Bahl and is in the process of raising Series A funding. Rathore will take a backseat from running Quintype once the new funds are fully operational, he said.