3one4 Capital raises $200M for its fourth fund

3one4 Capital, the early-stage venture capital firm, raised $200 million as part of its newly launched fourth fund as it looks to continue with its strategy of disciplined investment into startups.

This is the sixth fund for 3one4 Capital, with four funds focusing on early-stage startup investments.

According to the VC firm, the fourth fund was oversubscribed to the tune of $250 million, but it decided to adhere to its disciplined model to maintain the fund’s intended size.

Besides Indian banks, mutual fund houses, family offices, and corporates, overseas investors, including US university endowment funds, global sovereign funds, and corporations participated in the fourth fund. According to 3one4, Fund IV has over 90% institutional investor base.

The fourth fund will invest across sectors in around 30-35 startups, with funding amounts ranging between $0.5 million and $5 million.

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3one4 Capital will focus on sectors including consumer internet, SaaS, fintech, and enterprise and SMB digitisation. Also, it will increase investments in newer areas like digital health, climate tech, and more. Besides, it will also look at post-seed and Pre-Series A funding rounds.

“We have always been disciplined in our investment strategy over the last seven years, and we will not dilute our method for any reason. We will continue to be selective on where we invest and the fund sizes we will manage,” said Pranav Pai, Founding Partner, 3one4 Capital.

Today, 3one4 has $510 million in committed capital and over $750 million of assets under management with a cumulative market cap of its portfolio companies of over $7.5 billion. The VC firm which has invested in over 80 startups has firms such as Licious, Darwinbox, Open, and Jupiter to name a few.

The launch of the fourth fund also marks 3one4 Capital's debut at GIFT IFSC and its first offshore vehicle.

The first close of Fund IV was completed in March 2023 and the VC firm has approved over five deals. The final close is expected by the end of the first quarter of the current financial year.

3one4 Capital's fund III was also oversubscribed from its initial target of $150 million and completed its final close at $200 million as the final size.

The funding comes during funding winter, with startups finding it difficult to raise large amounts of capital and investors turning cautious about providing money.

At the same time, 3one4 Capital has seen certain changes in the overall environment, especially the kind of startups approaching the VC firm.

“The founder profile has definitely improved significantly over the last few years. We now see more founding teams coming equipped with deeper domain expertise, having seen and experienced scale, and having built large operating teams before,” said Pranav.