Stakeboat Capital launches Fund II to focus on healthcare and manufacturing SMBs

Stakeboat Capital has launched its second fund of Rs 1,000 crore. The fund will continue to invest in small and medium enterprises (SMEs) with revenue between Rs 50 crore and Rs 250 crore in the form of both primary and secondary transactions.

Chandrasekar Kandasamy, Founder and Managing Partner, Stakeboat Capital, said, ”We are delighted to launch Fund II, which further reaffirms our commitment to recognise and support SME entrepreneurs. We will be focused on our investment strategy, identifying SMEs with revenues ranging between Rs 50 and Rs 250 crores wherein we would like to hold 51-70 percent equity shareholding in the target companies.

"Our strategy has worked out very well in Fund I and is reflected in the performance. We have supported SME entrepreneurs in multiple ways, be it in monetising their business or bringing in global connects and relationships through our partnership network.”

Fund II will look at deals in healthcare and life sciences, B2B technologies, and businesses and services that include value-added industrials and manufacturing. 

Stakeboat will look to exit a company in three to five years in the form of either a strategic sale or a secondary sale to a larger investor. It is looking to expand access for Fund II to a broader set of investors from domestic and international markets. The company is expecting to raise a large part of Fund II from institutional investors and family offices.

Stakeboat received SEBI approval for Fund II in early  November 2020.

Kandasamy said, “The first close of Fund II is expected to happen between June to September 2021; we are targeting the final close in 2022. We have had a successful run with Fund I so far. More than 70 percent of Fund I has been fully deployed.

"We expect to invest in two more companies by March 2021, post which the fund will be fully deployed. All portfolio companies where Fund I is deployed have demonstrated resilience in terms of getting back to normalcy and would end up achieving a 20 to 100 percent  growth for financial year March 2021 compared to pre-COVID financials.”

Stakeboat’s portfolio of investments includes Leixir Resources (dental labs), Sankalp Semiconductor (Analog and Mixed Signal Semiconductor services), Dvara Financial Services (NBFC targeted at Tier 4/Tier 5 towns and villages), and LeadSquared (SaaS).

Stakeboat’s Fund I is backed by domestic investors comprising HNIs, family offices, and Indian institutional investors like SIDBI, NABARD and BIRAC.