Early stage venture capital (VC) firm Vertex Ventures Southeast Asia and India has raised $541 Mn for its fifth fund, the VVSEAI Fund V. The VC firm had initially targeted $450 Mn for the fifth fund, which is 80% larger than the $305 Mn fourth fund which it raised in 2019.
The announcement follows around two months after the Temasek-owned VC firm marked the first close of its latest fund, Vertex Master Fund III, at around $900 Mn.
The VC firm’s existing limited partners (LPs), including sovereign wealth funds, financial institutions, corporates and family offices across Asia and Europe, along with new LPs such as Japan Investment Corporation (JIC), International Finance Corporation (IFC) and DEG (German Development Finance Institution) have backed the fund.
Vertex Ventures has also set aside a co-investment fund of $50 Mn for partnering with the parent fund in women-led startups. The VC firm said that the move aligns with its commitment to foster more opportunities for women entrepreneurs, as more than 35% of the startups in its Fund IV portfolio have at least one female founder.
Piyush Kharbanda, general partner of Vertex Ventures Southeast Asia and India, said, “This fundraise is a testament to the quality of opportunities in the India and Southeast Asian markets. The macro opportunity is palpable, but what excites us more is the continuing maturity of the ecosystem and the quality of founders we are working with in building category-defining companies.
The VC has made more than 80 investments and said it would further invest in sectors like enterprisetech, fintech, consumer internet, healthtech, sustainability and mobility. Vertex’s India portfolio includes startups such as Licious, KukuFM and Kissht, among others.
Vertex added that it delivered ‘strong cash returns’ to its LPs from its earlier funds after exiting from its investments in Grab, FirstCry, XpressBees and Recko, among others.
“Our earlier funds have had superior cash-on-cash returns and are outperforming benchmarks. This track record led most of our investors from VVSEAI Fund IV to return as investors in VVSEAI Fund V and increase their allocation. In addition, we expanded our total investor base significantly and are happy to welcome all our Limited Partners,” said Ben Mathias, managing partner of Vertex Ventures Southeast Asia and India.
Vertex Ventures’ new fund comes at a time when VCs have raised billions of dollars in dry powder but have not deployed these funds given the adverse global macroeconomic environment. As per Inc42 data, VC firms active in India have either announced or closed funds of around $22 Bn since the start of 2022, with funds worth around $4 Bn announced or launched since the start of 2023.
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