BlueHill VC to invest in Helex, top up investment in EtherealX as it looks to sharpen its deep-tech portfolio
In a conversation with YourStory, the early-stage VC firm detailed the kind of spotlight sectors the firm is looking to make investments in as it targets the final close of its Rs 350 crore maiden fund by the end of this year.
Chennai-based early-stage venture capital firm BlueHill VC has invested in Hyderabad-based startup Helex, which is developing advanced therapeutics for the needs of patients with genetic kidney diseases.
While the firm did not disclose how much it has invested in the company, initial cheque sizes are about $1 million per company. For follow-on investments, the company’s cheque sizes are between $2 million and $4 million.
In line with this range, the firm is investing about $3 million in space-tech startup EtherealX’s upcoming $20 million round, which, according to BlueHill’s Managing Partner, Manu Iyer, is happening at 4.5X markup for the VC firm. The round has also been over-subscribed, with the company receiving commitments worth $25 million for its $20 million round.
BlueHill had invested in EtherealX seed round back in 2023, during which it raised $341,000 at a $2.4 million post-money valuation, according to data website Tracxn.
The firm is currently in the midst of raising its maiden fund with a target corpus of Rs 350 crore and a green shoe option of Rs 50 crore. BlueHill is looking to back companies building foundational technology in engineering and sciences, focusing on intellectual property.
According to the firm, it is broadly looking to focus on deep-tech sectors such as space and defence, manufacturing and IoT, industrial technology, semiconductors, biotechnology and electric vehicles, along with chemicals. “We are looking to back companies that are building this tech from the ground up, not companies that are, let’s say, copying something that exists in the West, but, saying, ‘I can do it cheaper’or existing tech in India or, elsewhere you are incrementally adding on, a 10% or 15% to it We are looking to back founders that are changing the paradigm of how certain things are done. And broadly, that is the thesis of our fund,” Iyer told YourStory.
The firm will look to invest about $1 million each in 15-20 companies and make follow-on investments in about 7 or 8 companies, Managing Partner Sridhar Parthasarathi told YourStory.
So far, it has raised about Rs 260 crore with a Rs 70 crore commitment from Small Industrial Development Bank (SIDB) and a Rs 10 crore commitment from the Kerala state government’s Kerala Startup Mission. The rest of the amount has been raised from a series of marquee investors.
BlueHill VC also follows a regimented exit strategy—one which has worked well for the firm. After writing an initial cheque and a follow-on round, the third round is when the firm looks to maximise its investment, whereby it does not participate in the round but plans out its exit in the fourth round of funding. ”What we have seen, again, there is historical data around it, where you would see any good company, any good startup, takes capital anywhere between Rs 80-24 crores. So, if you really look at it, 4 rounds, 3 cycles, typically about a 60-month time frame, you should have the ability to exit as well. Today, there are larger funds which are coming in as well, which increases the scope of secondary rounds.”
The strategy seems to be working in the firm’s favour. According to both Iyer and Parthasarathi, the returns being recognised from previous bets have been great. “Both Sridhar and I had individually invested in a company called Detect Technologies. At that point in time, we did not know each other. We had individually invested in this company, and it has delivered a fantastic outcome of about 70X from the seed round that we invested in. And then, I have done a pro rata in every round since and delivered a significant outcome,” Iyer noted.
Additionally, Iyer added that the duo has delivered returns of around 35% internal rate of return (IRR) in their previous investments, which was a smaller quantum of capital. With the new fund, the firm is looking to increase the amount of capital that is being deployed.
BlueHill’s current portfolio of companies includes EV-motorcycle maker RapteeHV, last-mile logistics platform Fyn Mobility, and supply chain viability enabler Intugine, among others.