3one4 Capital launches $100M fund to back early-stage startups in India

3one4 Capital, a venture capital firm in India, today announced a $100 million fund as the young investment firm looks to back more early-stage startups in the world’s second largest internet market.

The new fund, third for the five-year-old Bangalore-headquartered investment firm, has already secured $40 million from new and existing investors. 3one4 Capital, which closed its previous fund late last year, now manages over $210 million in capital.

In the last four years, 3one4 Capital — founded by Pranav Pai and Siddarth Pai, sons of TV Mohandas Pai, a widely respected industry figure who served as a senior executive at Infosys — has backed more than 50 startups.

Some of its high-profile profile investments include neobanking startups Open and Jupiter, digital entertainment firm Pocket Aces, HR software provider DarwinBox, mobility firm Yulu and Licious, which sells fresh meat digitally.

In an interview with TechCrunch, Pranav said the new fund would enable 3one4 Capital to continue to invest in a wide range of early-stage startups. The firm largely focuses on seed and pre-Series A financing rounds, but it has also backed startups in Series A and later-stage deals.

Pranav said his firm will continue to invest across five categories — namely, direct-to-consumer tech, media and content, fintech, deep technology and SaaS and enterprise automation, in addition to exploring some new opportunities.

3one4 Capital’s first two funds have performed very well and doubled the investment capital before entering the fourth year, said Siddarth, but he declined to reveal the figures, citing confidentiality agreements.

Pranav Pai, left, and Siddarth Pai are managing partners at 3one4 Capital (Image Credits: 3one4)

Neither of the Pai brothers had a background in investment before they started 3one4 Capital, and Pranav said that’s one of the things that differentiates them from others. “We are a very young firm. Nobody has joined 3one4 Capital with prior VC experience. Our approaches are different,” he said.

The brothers said they will invest in 25 to 30 startups through this new fund — which is always exciting to hear.

Scores of VC firms in India, including Blume Ventures, Lightspeed India Partners, Sequoia Capital India, Good Capital and India Quotient, are today focusing on early-stage startups, but data from research firm Tracxn — another portfolio startup of 3one4 Capital — suggests that each year we are seeing fewer young firms secure capital.