8i achieves first close of second fund, says there’s high quality deal flow at seed stage

Early-stage venture capital fund 8i Ventures has announced the first close of its $50 million second fund. The fund has raised $25 million as the first close from family offices like Salgaocars and Kothari (DSP), who were also part of its first fund.

Talking to Business Today, 8i founder Vishwanath V said the company sees phenomenally high-quality deal flow at seed stage which it will look to capture with the new fund.

“From an investing point of view, at seed level, insane competition lies at Series B and to an extent at Series A because large investors even the likes of Tiger have been trying to get in earlier. They realize that beyond a certain stage, companies get baked in a lot of valuation, multiples increase, and their overall returns get affected, so they might as well go in at Series A. Seed is still a place where you need a high degree of domain understanding and a little bit of conviction as well. We find phenomenally high-quality deal flow at seed, especially at this winter, in the last 3-4 months,” Vishwanath said.

Founded in 2019 by Vikram Chachra and Vishwanath V, 8i Ventures invests predominantly in fintech and commerce.

“Our key insight when we launched Fund I, was that consumer payments and commerce is a trillion-dollar opportunity. Since then, digital payments have swelled from US$200 billion a year to US$720 billion now. With Fund II, we have an added focus on B2B fintech and commerce - which we believe to be the next trillion-dollar market in India,” Vikram Chachra said in a statement.

The second fund will invest in about 15-20 companies with average ticket size ranging around $1.5-$2 million. It may also make some very early bets in the sub-one million dollar range, and reserve some capital for follow-on investments.

“We are looking at Business-to-Business (B2B) payments, across verticals, as a focus area within the larger stream of payments. On the commerce space, one of the areas that we are interested in is the ecommerce enablers segment,” he added.

8I’s $15.5 million first fund has invested in companies such as Slice, M2P, Carwale.com, EzeTap, Blue Tokai, MoneyTap and Signzy. The firm made a partial exit of its seed investment in M2P Fintech. According to the company the exit was done at a 36X multiple, clocking an IRR of 415 per cent over 2 years.

The company said it has already returned 27 per cent of its capital back to investors.

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