Axilor Ventures to launch $100 mn proprietary second fund with 15-year lifecycle
Named Axilor Technology Fund – II, it has a 15-year tenure, unlike the typical 10-year VC fund lifecycles, which enables the investor to stay with its portfolio companies much longer. The longer tenure is possible as it is a proprietary fund with a majority of the target corpus coming from the family houses of Kris Gopalakrishnan and SD Shibulal, and the remaining amount pooled in by other three founders Tarun Khanna, Srinath Batni, and Ganapathy Venugopal.
- Jul 6, 2022,
- Updated Jul 6, 2022 5:39 PM IST
Axilor Ventures, a seed fund launched by a group of tech veterans including Infosys co-founders Kris Gopalakrishnan and SD Shibulal, announced the launch of its second fund with a target corpus of $100 million. The fund's target is almost four times the size of the first fund.
Named Axilor Technology Fund – II, it has a 15-year tenure, unlike the typical 10-year VC fund lifecycles, which enables the investor to stay with its portfolio companies much longer. The longer tenure is possible as it is a proprietary fund with a majority of the target corpus coming from the family houses of Kris Gopalakrishnan and SD Shibulal, and the remaining amount pooled in by other three founders Tarun Khanna, Srinath Batni, and Ganapathy Venugopal.
“The proprietary fund gives us a fair bit of flexibility to recycle, redeploy and time our exits, and focus more time on what we do best, which is working with start-up founders. It is very important to take longer term view because like what we are seeing now and what we saw in 2017, it is difficult to time market cycles. Given that we play in early stages, it also means that the uncertainty is very high. So, a longer tenure allows us to take a medium to longer-term view. Even from a fund return perspective, it is important for us to be on the right side of the cycle, it gives some flexibility in deciding how we manage our investment cycles as well as exit cycles,” said Ganapathy Venugopal, Co-founder and CEO of Axilor.
The fund will continue to back start-ups in enterprise SaaS, B2B commerce, agritech, consumer tech, fintech, and health-tech sectors. Venugopal said the fund will set aside 30 per cent of the new corpus for investing in 10-12 to performing from its first fund.
With an average cheque size of $750,000 to $1 million, the fund expects to back about 100-125 start-ups over the next 10-12 years deployment.
The maiden fund, Axilor Technology Fund-I, was launched in 2018, and has invested in 54 startups. The company said in a statement that it has an industry-leading follow-on rate of over 75 per cent with 21 of its portfolio start-ups having already crossed Series A and beyond. Its portfolio of companies includes Detect, Enkash, Headfone, Locofast, Loco, Medfin, Niramai, Urban Piper, Vyapar, and Wiz.
“Our focus as a seed fund and our promise to early-stage founders have always been that we will work with them closely with a deep engagement model and help them improve their odds of success of getting to Series A. Within our four years of active deployment, we expect the number of Series A companies to grow to 32, which should take us to Series A conversion rate of almost 3-3.5x of system average,” Venugopal said.
He also added that the fund sets aside an amount for potential bridge rounds for each of its investee firms to help them get to the Series A stage.
“We are conscious that when founders are building companies, they also want to be not under pressure for their next fundraise just because of the market conditions. Therefore, we are consciously setting aside almost 250,000 as potential bridge for every cheque that we write so that we can give that amount of freedom and flexibility to founders to time their next fundraise,” he added.
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Axilor Ventures, a seed fund launched by a group of tech veterans including Infosys co-founders Kris Gopalakrishnan and SD Shibulal, announced the launch of its second fund with a target corpus of $100 million. The fund's target is almost four times the size of the first fund.
Named Axilor Technology Fund – II, it has a 15-year tenure, unlike the typical 10-year VC fund lifecycles, which enables the investor to stay with its portfolio companies much longer. The longer tenure is possible as it is a proprietary fund with a majority of the target corpus coming from the family houses of Kris Gopalakrishnan and SD Shibulal, and the remaining amount pooled in by other three founders Tarun Khanna, Srinath Batni, and Ganapathy Venugopal.
“The proprietary fund gives us a fair bit of flexibility to recycle, redeploy and time our exits, and focus more time on what we do best, which is working with start-up founders. It is very important to take longer term view because like what we are seeing now and what we saw in 2017, it is difficult to time market cycles. Given that we play in early stages, it also means that the uncertainty is very high. So, a longer tenure allows us to take a medium to longer-term view. Even from a fund return perspective, it is important for us to be on the right side of the cycle, it gives some flexibility in deciding how we manage our investment cycles as well as exit cycles,” said Ganapathy Venugopal, Co-founder and CEO of Axilor.
The fund will continue to back start-ups in enterprise SaaS, B2B commerce, agritech, consumer tech, fintech, and health-tech sectors. Venugopal said the fund will set aside 30 per cent of the new corpus for investing in 10-12 to performing from its first fund.
With an average cheque size of $750,000 to $1 million, the fund expects to back about 100-125 start-ups over the next 10-12 years deployment.
The maiden fund, Axilor Technology Fund-I, was launched in 2018, and has invested in 54 startups. The company said in a statement that it has an industry-leading follow-on rate of over 75 per cent with 21 of its portfolio start-ups having already crossed Series A and beyond. Its portfolio of companies includes Detect, Enkash, Headfone, Locofast, Loco, Medfin, Niramai, Urban Piper, Vyapar, and Wiz.
“Our focus as a seed fund and our promise to early-stage founders have always been that we will work with them closely with a deep engagement model and help them improve their odds of success of getting to Series A. Within our four years of active deployment, we expect the number of Series A companies to grow to 32, which should take us to Series A conversion rate of almost 3-3.5x of system average,” Venugopal said.
He also added that the fund sets aside an amount for potential bridge rounds for each of its investee firms to help them get to the Series A stage.
“We are conscious that when founders are building companies, they also want to be not under pressure for their next fundraise just because of the market conditions. Therefore, we are consciously setting aside almost 250,000 as potential bridge for every cheque that we write so that we can give that amount of freedom and flexibility to founders to time their next fundraise,” he added.
Also Read: RBI announces slew of measures to enhance forex inflows as rupee tumbles
Also Read: EXCLUSIVE: Edible oil prices set to fall further in India