Private Equity (PE) investment firm Matrix Partners India has has raised a new fund of $300 million (~ ₹ 2103 Crores) with plans to invest it in early-stage startups across emerging sectors and expand its current investment team.

Notably, the PE firm has raised its new fund after nearly eight years, since 2011. Matrix Partners India is the local franchise of US-based Matrix Partners, which currently has at least $4 billion under management.

Led by General Partners Avnish Bajaj and Rishi Navani, Matrix India's first fund was set up in August 2006 with a $150-million corpus, later topped up to $300 million. In 2011, Matrix raised its second fund, which also had a corpus of $300 million.

In 2016, Matrix India chose not to raise a full-sized fund and instead decided to top up its second fund with a $110-million funding boost.

In an interview, Matrix Partners founder and managing director Avnish Bajaj said the VC would continue to stay bullish on ventures in the consumer internet space, while being more selective in sectors such as fintech.

“We never target a particular number of investments or deployment. By virtue of deepening of the market, the top of the funnel itself has improved... Our strategy remains to work with the best founders—we want a disproportionate market share of the best founders,” said Avnish Bajaj, Matrix Partners India founder and managing director.

“We think e-commerce and marketplaces are under-invested and fintech has been over-invested in. E-commerce is in a different avatar now, with tinges of social media and WhatsApp. SaaS and enterprise is taking off,” added Bajaj. Before Matrix, Bajaj co-founded with Nexus Venture Partners founder Suvir Sujan, eventually surviving the dot-com bust to engineer the then-biggest sale of an Indian startup to eBay Inc. for $55 million in 2004.

Bajaj indicated Matrix will stay away from “overheated” sectors such as food tech, which has attracted a glut of funding over 12-18 months. In December, leading food delivery service Swiggy raised $1 billion in primary and secondary capital from a clutch of top-tier investors. Fellow managing director Vikram Vaidyanathan said Matrix will make more investments every year with a larger team in near future, so that “we can make more bets as the market deepens”.

“(What) has happened is that a lot of people who have helped build out the Flipkarts and Paytms of the world and have worked with these star founders, have learnt best practices from them and have now ventured out to start their own companies, so the quality (of companies) has gone up because the number of experienced founders has gone up,” said Tarun Davda, a managing director at Matrix.

Over the past five-six years, Matrix India has participated in some of the most prominent technology deals in the startup ecosystem, including those involving Ola, Practo and Quikr. According to Crunchbase data, Matrix Partners India has made 68 investments, with its most recent investments made in last month, when it invested $3.2 million in Housejoy, a Bangalore-based home services startup, and $9 million in MoEngage, a California-based Intelligent Marketing Cloud for consumer businesses.

Matrix India has also backed fast-growing ventures such as DailyNinja, Stanza Living, Vogo and Ziploan. Till date, Matrix has partially or fully exited from at least 30 startups that it has invested in. The most notable exits of Matrix India include Mswipe Technologies, Just Dial, and TinyOwl Technology.

In April 2016, when India's startup ecosystem was going through downturn, Navani left to start his own fund. After surviving this rough patch, Bajaj, along with Davda and Vaidyanathan, decided to reposition Matrix’s focus on technology and Internet investments. During that time, Matrix decided against raising a new fund—unlike most of its top-tier peers like Sequoia and Accel—and made do with a top-up of $110 million on its second fund.

Source - Livemint

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