Anicut Capital closes second debt fund, raises Rs 875 Cr to invest in 30 startups

Anicut Capital, through Grand Anicut Fund - 2 will invest in about 30 startups operating across consumer, food and beverage, and technology, among other categories.
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Debt investment firm Anicut Capital on Wednesday said it closed its second debt fund — Grand Anicut Fund - 2 — where it raised Rs 875 crore to invest in about 30 startups operating across consumer, food and beverage, and technology, among other categories.

The fund, which originally planned on raising Rs 700 crore, got SEBI approval with a greenshoe option to raise an additional Rs 300 crore.

So far, the Chennai-based investment firm claims to have invested in over 12 early-stage startups, with the average deal size between Rs 15 crore and Rs 100 crore, according to a statement by Anicut Capital.

"The Grand Anicut Fund 2 has already invested close to Rs 500 crore in various pioneering and promising startups. We also have a robust pipeline of slated deals that are undergoing due diligence of evaluation and assessments from our end, and we shall be announcing them in the due course of time," Ashvin Chadha, Co-founder and Managing Partner, Anicut Capital, said.

Founded in 2016 as Anicut Capital LLP, the investment firm manages two debt funds and an angel fund and has Asset Under Management (AUM) worth Rs 1,500 crore.

The news comes at a time when other venture debt firms, including Trifecta Capital and Mumbai-based Alteria Capital, have also closed some of the biggest rounds.

As the Indian startup ecosystem is maturing, founders are choosing a mix of debt and equity to reduce equity dilution while raising funds. The lure of avoiding every possible equity dilution is justified as founders can give a lot more than their time and energy to make an idea work and grow.

In 2021, Anicut's second fund financed juice maker Raw Pressery's acquisition by Sequoia India-backed sauce and dips brand Wingreens, which is planning to get listed.

The maiden fund — Grand Anicut Fund 1 — hit its first close in 2016 and final close in 2018 at Rs 400 crore and made Rs 700 crore worth of investments in companies, including dairy player Milky Mist, omnichannel makeup brand Sugar Cosmetics, and Biryani Blues, among others.`

Update:

On January 31, the Chennai-based debt investment firm raised Rs 140 crore from the Small Industries Development Bank of India (SIDBI) for Grand Anicut Fund-2. The funds received from SIDBI is through the Fund of Funds for Startups (FFS) launched under the Startup India Initiative of Govt of India in January 2015.

The ambitious Rs 10,000 crore FFS forms a part of Union Budget Allocation and was launched to boost the growth of the startup ecosystem of the country. Managed by SIDBI, FFS contributes to the capital of SEBI-registered Alternative Investment Funds (AIF) instead of investing directly into startups. Thus, the corpus received has been down-streamed directly from the Ministry of Corporate Affairs. 

Edited by Suman Singh

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