Iron Pillar closes $129 mn cross-border fund; aims to take Indian SaaS start-ups to global markets

Growth-stage venture capital fund Iron Pillar has closed a dedicated growth-stage fund which will focus on pure cross-broader Software-as-a-Service (SaaS) start-ups. The $129 million fund will invest in SaaS start-ups building cyber security and governance, DevOps tools, future of work and education, and automation solutions that have shown global market potentials. 

“India is in a very interesting space for SaaS. We already have so many SaaS companies which are built from India. We have extremely high-quality talent who can build global products at scale. They have the cost advantage as well. We believe that some of the Indian SaaS companies would become catalysts for buy and build for large SaaS firms globally,” Anand Prasanna, Managing Partner, Iron Pillar, told Business Today. 

The fund will invest in companies that are at $5-$10 million annual recurring revenue with some form of global presence.

“Typically, we don’t invest before the global part of the business has started and shown some traction. We are growth stage fund, we can wait for that event (global expansion) to happen. That event happening in a right way is a big risk for a lot of these companies. Some of them take multiple iterations to make it happen. We don’t take that risk,” Prasanna said. 

This fund is a part of Iron Pillar Fund II series of Funds and saw participation from its existing institutional investors from the US, Europe and the Middle East, and a new list of investors including two Endowments and a Foundation. 

“Companies, founded by Indians that are incorporated in the US with their product development happening from India, we help them expand to Europe, Middle East or Southeast Asia. Another focus is on companies that start in India. They cater to clients in India initially and then expand to other markets. Eventually, they try to move their headquarters to the US because customers would want to have their companies serving them on their backyard, they don’t want them to be on the other side of the world. It’s not an outsourcing industry. These are direct product companies, they need to be close to the customer,” Prasanna said. 

Iron Pillar typically builds a concentrated portfolio of eight start-ups with each fund. Since founding in 2016, the fund has backed several global cloud software companies built from India including Uniphore, Servify, CoreStack, Ushur, Jiffy, Sibros and Pando and a number of business-to-consumer start-ups such as FreshToHome, BlueStone, and Curefoods. The VC firm currently has nearly $500 million in Assets Under Management (AUM). 

Iron Pillar’s typically starts investments at Series B and C stages and later doubles down on breakout businesses with 5x to 10x of its initial investment with funds pooled in from its parallel vehicles. 

In addition to capital, Iron Pillar's portfolio companies benefit from the firm's global network which offers assistance with business development, go-to-market strategy, hiring and strategic partnerships.  

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