Mumbai-based Cactus Venture Partners has announced the successful final close of its inaugural early-stage fund, securing INR 630 Cr ($75.8 Mn) in investments. The fund's journey commenced with its first close in August 2022.
Comprising approximately 70 limited partners (LPs), the fund boasts a diverse investor base, with 60% originating from India and the remaining 40% hailing from international markets, primarily the US, Singapore, the EU, and the UK. Notably, leading Indian development financial institutions, including SIDBI, Self-Reliant India Fund (SRI Fund), and the UP Startup Fund, have also thrown their support behind the venture capital (VC) firm's debut fund.
Cactus Venture Partners has already directed investments into six promising startups – Kapture, Vitraya, AMPM, Auric, Lohum, and Rubix – from its fund, with the latter marking the firm's maiden exit in March 2023, boasting an impressive internal rate of return (IRR) of 48%.
Founder and general partner of Cactus Venture Partners, Rajeev Kalambi, emphasized the firm's strategy of backing startups with established product-market fit and driven founders poised for growth. Kalambi revealed plans for an additional 8 to 10 focused investments over the next two years, underlining the firm's commitment to conviction-oriented investment approaches.
Launched in 2020 by Anurag Goel, cofounder of Cactus Communications, along with seasoned investor Amit Sharma and former banker cum PE investor Rajeev Kalambi, Cactus Venture Partners set out with a sponsor capital ranging from $7 Mn to $8 Mn. While the fund initially targeted a total raise of INR 750 Cr with a green shoe option of INR 250 Cr, market conditions during the ongoing funding winter necessitated closing the maiden fund below this target.
Reflecting on the fundraising journey amidst challenging market dynamics, Amit Sharma acknowledged the trust bestowed by LPs despite the adverse climate, considering it a testament to the team's credibility and resilience.
The funding winter, which descended upon the Indian startup ecosystem in 2022, has led to widespread disruptions, shutdowns, and layoffs, with overall startup funding plummeting by 60% to $10 Bn in 2023 from $25 Bn in the previous year. Similarly, funds earmarked for startups witnessed a sharp decline of 69%, dwindling to $5.6 Bn in 2023 from $18 Bn in 2022.
