Panthera to raise $250-m fund to back tech startups

Singapore-based growth-stage investment firm Panthera Growth Partners on Tuesday announced the first close of its second fund, having secured commitments for more than half of the target raise. The fund’s target has been set at $250 million, and is expected to be reached by end of this fiscal year. The fund will offer up to 100% of fund commitments in co-investment opportunities.

Shilpa Kulkarni, founder and managing partner, Panthera Growth Fund, told FE that the fund plans to invest in emerging “next-generation” consumption and enterprise services businesses with growth potential. “Essentially, we are looking at both consumer internet and SaaS businesses. According to us, next-generation consumption areas specifically in India include fintech, agritech, insuretech, and consumer tech.

Around 60-70% of the capital allocation would be reserved more towards consumer areas while the allocation is dedicated towards B2B and SaaS segments,” Kulkarni said. The fund’s capital will be invested in companies that have achieved a product-market fit and are at least beyond the Series B stages. Panthera will deploy around $20 million on average across 10-12 individual portfolio companies across India and Southeast Asia.

Backed by institutional investors from India, EU and USA, the fund will seek to support entrepreneurs who typically employ market transformational ideas propelled by technology. Panthera was founded in 2021 and its first fund, which raised $84 million from global institutional investors, is largely deployed across sector-leading companies such as BigBasket, Pepperfry, Zivame and OfBusiness. Venture capital and private equity funds focused on the Indian market have raised record funds across both early and late stages in the last two calendar years, backed by incremental interest from limited partners and other institutional investors.

However, deal-making, especially across growth stages, has slowed down in the past two quarters due to the global slowdown and inflationary pressures. Kulkarni said although there has been larger interest from institutional and other global investors dedicating capital to the Indian market, the sentiment has been tepid due to tech stock correction in the public markets. “With consumer companies facing inflationary and due to the general global environment, most investors are in a wait-and-watch mode.

However, this is not the first time there has been a correction in valuation and dealmaking. There have been multiple slowdown instances in the last 20-25 years and markets have always bounced back,” Kulkarni said. In addition, startup and IT exits among private equity and venture capital investors in 2022 have slowed down significantly due to bearish sentiment in public markets, coupled with younger portfolios of top funds witnessing lower exits compared to pre-2021 stages.

According to recent a report by management consulting firm Bain & Company, this year’s exit activity stood at just $5. 9 billion so far, which is a 56% decline over the last year’s activity over a similar duration. In CY21, exits grew by 4X to $36 billion.

The exit activity is expected to weaken further in 2022 even as the pace of deals has been slowing down. However, large PE and VC funds continue to keep pace with their funding activity over the last year, indicating confidence in the fundamentals of the Indian market, the report said. .