Mumbai-based Cactus Venture Partners Closes Maiden Early-Stage Fund at $75.8 Mn
Mumbai-based venture capital firm Cactus Venture Partners has announced the final close of its maiden early-stage fund, raising INR 630 Cr ($75.8 Mn). The fund, which had its first close in August 2022, has around 70 limited partners, with 60% of them hailing from India and the remaining 40% made up of overseas partners. Notably, development financial institutions such as SIDBI, Self-Reliant India Fund, and the UP Startup Fund are among the backers of Cactus Venture Partners’ first fund.
Investment in Six Startups and First Exit
Cactus Venture Partners has already invested in six startups from its fund, including Kapture, Vitraya, AMPM, Auric, Lohum, and Rubix. The VC firm also celebrated its first exit in March 2023 with Rubix, achieving an internal rate of return (IRR) of 48%.
Focus on Growth and Conviction-Oriented Investments
Founder and General Partner Rajeev Kalambi shared that the firm focuses on startups with established product-market fit and founders with a growth mindset. Kalambi also revealed plans to make 8 to 10 more “focused, conviction-oriented investments” in the next two years.
Successful Funding Close Amid Challenging Market
Despite ongoing challenges in the funding landscape, including a significant decline in Indian startup funding in 2023, Cactus Venture Partners managed to close its maiden fund below its target of INR 750 Cr. Co-founder Amit Sharma acknowledged the difficult market conditions but expressed pride in gaining the trust of limited partners and achieving their set target.
The Growth Acceleration Playbook
Cactus Venture Partners employs its in-house investment thesis, Growth Acceleration Playbook (GAP), to help startups realize their growth potential. With a focus on providing necessary resources and guidance, the firm actively supports star founders on their journey of growth.
Broad Sector Focus on B2B SaaS, Climate Tech, and Healthtech
Cactus Venture Partners has a broad sector focus, with particular interest in B2B SaaS, climate tech, and healthtech businesses. Within each sector, the firm has identified 5-10 key subsectors for investment. For instance, in climate tech, the focus is on areas such as energy storage tech, battery recycling, sustainable agriculture, and waste management. In healthtech, differentiated business models leveraging technology in areas such as wellness, preventive healthcare, insurance, and primary and tertiary care are of interest.
Secular Growth in Primary Interest Sectors
According to Sharma, the firm’s primary interest sectors of B2B SaaS, climate tech, and healthtech offer sustainable and secular growth, allowing for future plans of launching new funds with the same investment thesis.
Analyst comment
Positive news: Mumbai-based Cactus Venture Partners successfully closes its maiden early-stage fund at $75.8 million, surpassing its target. The firm has invested in six startups and achieved its first exit with a 48% internal rate of return. The fund focuses on growth-oriented investments in B2B SaaS, climate tech, and healthtech sectors. The success of this fund positions the firm well for future funds with the same investment thesis. Market outlook: The market is expected to see increased activity and investment in the B2B SaaS, climate tech, and healthtech sectors.
