April 17, 2024

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Cedar Capital Marks First Close of $30 Mn Fintech Fund

3 min read

SUMMARY

The fund’s primary focus will be on banking technology, B2B fintech, insurance companies, NBFCs and other financial services

FinTech Venture Capital fund with an initial cheque size ranging from INR 4 to 10 Cr, aims to back around 15 early stage startups (seed to Series A funding rounds)

The fund is structured to follow a classic limited partner-general partner (LP-GP) model

Cedar Capital, the fintech-focused venture capital arm of management consulting firm Cedar and fintech market intelligence platform IBS Intelligence, has marked the first close of its INR 240 Cr ($30 Mn) FinTech Venture Capital fund, raising capital in the range of INR 50 to 75 Cr.

Leading family offices and institutional investors from India and the Middle East are among the limited partners to participate in this round.

FinTech Venture Capital fund with an initial cheque size ranging from INR 4 to 10 Cr, aims to back around 15 early stage startups (seed to Series A funding rounds), with a primary focus on banking and B2B fintech, insurance companies, NBFCs and other financial services.

Sahil Anand, founder and managing partner of Cedar Capital, said, “Despite the negative venture capital environment, we have had success in attracting interest for our fund in light of our BankTech and B2B sector-specialist focus and our global research and consulting reputation over 60+ years.” 

The fund is structured to follow a classic limited partner-general partner (LP-GP) model. The company expects to finalise its initial deal in the coming weeks. Additionally, the fund plans to invest further in 8 to 10 companies from its portfolio in the future.

In March 2023, Cedar Capital announced the launch of its fintech-focused venture capital fund, targeting regions including India, the Gulf Cooperation Council (GCC), and other markets. It appointed Subit Saurav from impact investment firm Aavishkar Capital to co-lead investments with founder Sahil Anand. Sunny Desa from YES Bank was also appointed to oversee investor relations and fintech investments.

The advisory board of Cedar Capital comprises industry veterans including Sanjiv Anand, chairman of Cedar Group; Pradip Shah, founder of CRISIL and HDFC; Bobby Parikh, co-founder of BMR Advisors; and Felipe Martinez, chief investment officer of Revolut, among others.

The development comes at a time when several institutional investors including venture capital and private equity firms, are establishing or concluding funds to support India’s struggling startup ecosystem.

For instance, in March, Mumbai-based venture capital firm Colossa Ventures marked the first close of its maiden women-focused fund at INR 100 Cr ($12 Mn).

Another early-stage venture capital firm focused on investing in frontier technology startups, Navam Capital marked the first close of its maiden alternative investment fund (AIF), Navam Venture Fund I, at INR 50 Cr (around $6 Mn) in the same month.

In February, Mumbai-based Cactus Venture Partners announced the final close of its maiden early-stage fund at INR 630 Cr ($75.8 Mn).

In the same month, asset management firm Rockstud Capital marked the first close of its second alternative investment fund at INR 68 Cr ($8.2 Mn).

Similarly, investment banking services company Equirus also marked the first close of its maiden early-stage venture capital fund.

According to the State of Indian Fintech Report Q4 2023, focusing on Rural Fintech, fintech funding in India saw a 12% decline in Q4 2023 compared to Q4 2022, totaling $413 Mn. This decline coincided with the lowest median ticket size observed in the past three years. However, lending tech continued to attract investor interest, while fintech SaaS emerged as a notable player during this period.


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