Exfinity Technology Fund, a venture capital fund floated by several IT industry leaders, has closed US$17 million in the first round. It will be used to boost tech startups in India.
Exfinity Fund is promoted by IT veterans such as Former Infosys CFO Mohandas Pai, Former India CEO of I-flex Solutions Deepak Ghaisas, Former Wipro Joint-CEO Girish Paranjpe and Former Infosys CFO V Balakrishnan.
The fund is fully subscribed and investors include CXOs, industrialists, family offices, professionals, ultra high net-worth individuals and institutional investors. Presently, only the greenshoe option of INR 25 crore (US$4 million) is open for exercise and is also expected to be filled in the coming weeks largely by institutional investors.
V Balakrishnan said, “We are excited about the speedy and successful subscription to the entire fund and greatly appreciate the support of our investors. Exfinity, with its strong pedigree of founders, coupled with holistic ecosystem of mentors, industry connects, subject matter experts and financing, provides a perfect platform for young entrepreneurs to realise their dreams.”
Incorporated in October 2013, Reservoir Investment Managers is focussed on funding technology ventures. Reservoir’s first offering is Exfinity Technology Fund, which will back ventures in the information technology space, especially those focussed on products and solutions in high-growth technologies.
It is looking to make investments in a mix of B2B and B2C firms in early- and emerging-stage. Also, the enterprise segment — Big Data and analytics, cloud computing, application development, e-commerce, education, healthcare, etc.
The fund has a five-year life with an option of two one-year extensions. It has a hurdle rate of 12 per cent with 2:15 management fee to carried interest ratio. The draw-down schedule is 20 per cent upfront and balance in installments.
Shailesh Ghorpade, CIO and CEO of Reservoir Investment Managers said, “Practitioners, who have scaled organisations, have global perspective on technology and markets, can bring their expertise to add unmatched value to the investee companies.” He also mentioned that technology was transforming business models globally and investors wanted to be a part of this journey and diversify their asset allocation, which has been traditionally into equity, debt, real estate and commodities.
“We are focussed on driven teams who have scalable ideas that can succeed with our high impact interventions,” said Balakrishnan. He further added that the technology space is becoming extremely exciting and with the barriers for entry coming down, the startup space is witnessing heightened activity.
The fund has signed up three deals so far and is conducting due diligence on all of them. All the deals are in niche areas and are promoted by pedigreed professionals, according to Balakrishnan.