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At the outset, let me share some good news with you. We have made great progress towards the first close of our USD 100M India Fund III. Several of our existing investors have confirmed their commitment to the new fund. We are pleased to now have three rather established anchor investors: Raj and Indra Nooyi (ex-CEO Pepsico), Bill Gates via his family office fund Gates Frontier, and the Godrej Industries Group. They have invested with us multiple times before and are making larger commitments than ever in this fund. I’m emailing you as well, as we’d like to chat about you joining our first close at the end of March 2025.

I want to highlight one key component of our investment strategy in our new fund. We plan to reserve up to 25% of the investable capital for follow-on investments in our growth/later-stage rounds of companies from our previous funds. These are businesses and founders we know well. Our goal is to return 1X your capital at high IRRs in the first 4 to 5 years. And then return multiples of your capital over the rest of the fund-life based on the early stage investments we will make. In other words, there is an opportunity fund wrapped in this fund. Not getting returns early is the common concern we hear in almost all our conversations with investors. We hope to address this with the “barbell strategy” I outlined above. 

Our portfolio continues to grow well. I wanted to highlight some interesting developments at  5C Network, India’s largest AI-based digital radiology platform. 5C started life as a tele-radiology company, providing cloud-based radiology services to far-flung diagnostic centers across the length and breadth of India. Fast forward to now, 5C is among the world’s most sophisticated multi-model AI-based medical imaging diagnostics companies.  Bionic, their SaaS platform that has been trained on more than ten million X-rays/CT-scans/MRIs, powers the radiology operations of some of the foremost hospital chains in India, including the Manipal Group. Not content with this, 5C is piloting a new product for proactive, preventive healthcare called EVO. EVO starts with a full-body MRI scan and creates a digital twin of your body. With the help of AI-driven insights, it then provides you with actionable advice on potential health risks. I strongly recommend you watch this video and check out https://medrayevo.in/. This is a terrific story of how a company can use technology to “reach the masses” and then build on it to become truly globally best-in-class. 

Even as we see our existing portfolio grow from strength to strength, we are ready to get going on the new fund! Our pipeline continues to build nicely with new Seed and Pre A opportunities. Over the past six months, we’ve looked at over 700 deals and spoken to 220+ founders. The velocity and opportunity are clear. 

The strong endorsement of our anchor investors, other returning investors, and new investors is heartening. Our first close quantum for this fund will already exceed the total amount raised for our previous fund. The long-term India story remains intact, notwithstanding any near-term volatility in public markets. We would love for you to join us in this exciting and rewarding journey. 

If you’re in Bangalore and want to discuss our new fund or how our portfolio companies are ready to take the next leap, I’d love to catch up over coffee.

Best,
Surya