Mumbai headquartered early-stage venture capital firm, Blume Ventures, has marked the first close of its third fund at $40 million.

Blume, which primarily focuses on seed to Series A rounds, is targeting a total corpus of $80 million. It seeks to achieve the final close early next year.

Blume Ventures provides seed funding in the range of $50K - $250K to early-stage tech-focused/tech-enabled ventures. They are proponents of a collaborative approach and like to co-invest with like-minded angels and seed funds. They then provide follow-on investments to their stellar portfolio companies, ranging between $500K and $1.5 million.

According to Sanjay Nath, co-founder and managing partner, Blume, the capital will be deployed across 30-35 companies, with an average ticket size of about $1 million. “We are looking to go deeper and invest bigger now. Both investors and the start-up ecosystem have matured since we started,” Nath said in a statement to business daily.

While the venture capital (VC) firm invested $100,000 to $150,000 in its first outing in 2011, it had increased its ticket size to $250,000 to about half a million dollars for the second fund.

With its Fund-II having a larger corpus at play, Blume is looking to invest about 60-65% of the new fund in domestic-heavy sectors such as healthcare, financial services, travel, commerce and brands, jobs and education and digital media & entertainment.

Security, robotics, and Internet of Things companies, which can innovate and engineer with local talent pools and also have the ability to scale globally, will also be on its radar.

The rest will focus on software tech, including cloud, artificial intelligence, analytics, software-as-a-service, blockchain and deep technology.

Also, Blume will now look to pick up 15-25% stakes in its portfolio companies, said Nath, adding that it is vying for larger ownership and longer and deeper commitment to “winners”.

“The larger fund, compared with our humble $20 million beginnings in Fund I, allows us to lead investments more emphatically for higher ownership, commensurate to the value-adding platforms that we have built and in time for fantastic founders that are emerging from the success stories of the first cycle in Indian start-ups,” said Karthik Reddy, co-founder and managing partner, Blume Ventures.

So far, Blume has invested in over 100 companies leading in about 40 investment rounds. Some of its major investee startups includes TaxiForSure, Zenatix, Chillr (acquired by Truecaller), Grey Orange, Unacademy, HealthifyMe, Purplle, Railyatri, Turtlemint and Dunzo, amog others.

In July, Blume had announced that it will a launch venture capital fund exclusively for B2B (business-to-business) startups in India, for which it has partnered with two US-based venture firms - Silicon Valley-based Benhamou Global Ventures (BGV) and Emergent Ventures, who will contribute to the fund.

Blume was founded in 2010 by Nath and Reddy . It raised its debut fund of $20 million in 2011, and, subsequently, the $60 million second fund four years later.

Nath believes that some of the portfolio companies have the ability to scale massively and make users pay for their services, besides the ability to pivot.

“Seeing these common threads has also taught us more about investments and this will affect our future investment decisions as well. We will look more closely at these qualities, and whether founders possess them or not.”

Blume's existing investments are spread across travel, healthcare, cloud, and content, including robotics start-up GreyOrange, which raised $140 million last month, making it the higest funded robotic startup in India.

Fund III will also fuel Blume’s expansion in the Delhi National Capital Region and Bengaluru.

Source - DealStreet Asia

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