VC Insights | Issue# 11 [March 11, 2025]
What?
Prime Venture Partners, a prominent early-stage venture capital firm in India, has successfully raised $100 Mn for its fifth investment fund. The firm plans to deploy this capital strategically, offering initial investments ranging from $2-4 Mn with potential scaling up to $12 Mn per company. Their investment target encompasses approximately 16-18 promising startups, with deployment expected to commence in the second half of 2025.
The fund has already secured approximately 80% of targeted commitments from various global institutional investors. These backers include family offices, university endowments, and fund-of-funds from diverse regions including the US, Singapore, Europe, and the Middle East. The firm expects to complete the fundraising process in the coming months. Learn more about the development through coverage by YourStory and Indian Startup News. Let us dive deeper.
Investment Focus
While the firm prepares to deploy its newly raised capital, Prime Venture Partners continues to support follow-on rounds for existing portfolio companies from its fourth fund raised in 2021. New investment activities from the fourth fund ceased in late 2024. The leading VC confirmed that it will support high-performing portfolio companies with the remaining capital until the first half of 2025.
Regarding investment focus, the firm maintains interest in cutting-edge technology sectors. Specifically, founding partner Sanjay Swamy indicated particular attention toward fintech, deeptech, Artificial Intelligence (AI), global Software-as-a-Service (SaaS) startups, and ventures aligned with India’s digital growth. The leading Indian VC firm typically makes approximately five investments annually.
Investment Strategy
Unlike many VC firms that progressively increase fund sizes, Prime Venture Partners has deliberately maintained consistency in its fund magnitude. This strategic decision reflects their commitment to a proven investment approach that has delivered reliable returns.
The firm’s investment strategy has evolved since its inception in 2012. Initially focused on pure seed-stage startups with investments around $500,000, Prime now emphasizes companies that have achieved product-market fit and secured early customers. The median check size has increased significantly to $3.5 Mn to better support these more established early-stage ventures.
Swamy noted that Limited Partners (LPs) often value stability and consistent performance over high-risk investments. He suggested many investors prefer multiple mid-sized successes rather than a single “unicorn” that might not provide substantial returns to the fund. Additionally, LPs value the firm’s close collaboration with portfolio startup founders.
Performance
Since its establishment in 2012, Prime Venture Partners has developed an impressive portfolio comprising over 50 early-stage Indian startups. Notable investments include WheelsEye, MyGate, Quizizz, PlanetSpark, Dozee, Zuper, Niyo, and KredX. The firm has achieved numerous successful exits, including the sale of Happay to Cred, Recko to Stripe, Perpule to Amazon, and Ezetap to Razorpay. Additionally, their portfolio company Tracxn successfully completed a public listing.
Regarding financial performance, the firm’s inaugural fund delivered approximately 4.7x returns, with subsequent funds also generating favorable outcomes. Swamy outlined a distinctive investment philosophy, emphasizing patient capital and strategic exits. He expressed preference for long-term value creation over early liquidation, noting that truly transformative returns typically result from portfolio companies achieving multi-billion-dollar valuations. One of the major reasons is that early exits generally happen when a startup that is not doing great gets acquired. While the firm has begun returning capital from its third fund, Swamy affirmed its preference for a measured approach to portfolio exits..
Growth Potential
The announcement arrives during a period of increasing pressure on Indian VC firms to demonstrate returns. Many domestic VCs approach the closure of their initial funds’ 10-year investment cycles, creating heightened expectations from LPs for capital distributions.
According to Swamy, investors remain optimistic about India’s long-term growth potential, particularly due to foundational digital infrastructure developments. He specifically highlighted platforms like Aadhaar, the Unified Payments Interface (UPI), and the Open Network for Digital Commerce (ONDC) as critical enablers of this growth.
With Netradyne being the latest addition to the list, the Indian startup ecosystem now boasts 119 unicorns and has attracted more than $100 Bn in VC investments during the past decade. Swamy noted that emerging technologies, particularly AI and deeptech, are creating new opportunities for product-led growth. Additionally, he suggested that recent successful technology IPOs demonstrating strong investor interest could motivate more high-growth startups to pursue public listings.
Thoughts
Prime Venture Partners’ substantial fundraise signals strong confidence in India’s entrepreneurial ecosystem, despite recent fluctuations in venture funding and the receding funding winter. The continued influx of institutional capital underscores enduring optimism regarding the long-term growth potential of Indian startups, particularly in technology-focused sectors.
The leading early-stage VC firm has a strong track record of backing top startups in India. With the recent wave of startup IPOs, some of its portfolio companies would probably look to go public. Successful IPOs will boost Prime Venture Partners’ performance and reinforce investor confidence. While the fund’s future performance remains to be seen, mature early-stage startups innovating in fintech, deeptech, AI, and SaaS for India definitely have promising opportunities ahead.
If you are interested to learn more, feel free to check out this coverage by YourStory and this article by Indian Startup News.
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Acronyms used in the blog that have not been defined earlier: (a) Million (Mn), (b) Venture Capital (VC), (c) United States (US), (d) Billion (Bn), and (e) Initial Public Offering (IPO).