High-Stakes is a unique series that focuses on dissecting the investments of venture capital firms to gain insights into the portfolio of companies they’ve invested in and the industries they focus on. In this edition of High-Stakes, we’ll be focusing on 3one4 Capital.
3one4 is an early-stage venture capital firm based in the Southern Indian city of Bengaluru. The firm’s focus areas include enterprise automation, ambient intelligence technologies, machine-driven actionable intelligence services, consumer products, fintech, digital media, and health.
The firm manages a corpus of more than US$310 million and has closed three regular funds, a specialist seed fund (Rising 1) and a special opportunities fund (Continuum 1). In its latest fund- Fund III, 3one4 raised Rs 15 billion (~US$ 196 million), 4.9x times larger than its predecessor- Fund II.
Fund III’s investors primarily include endowment funds, Indian family offices, and institutional investors. The fund is backed by established investors such as the Japan-India Fund-of-Funds – Nippon India Digital Innovation AIF (NIDIA), Catamaran, Premji Invest, CDC Group Plc, and the UK sovereign development finance institution.
Team
Key members of 3one4 Capital:
Pranav Pai– Founding Partner and Chief Investment Officer
Stanford grad Pranav Pai is the founding partner and chief investment officer of 3one4 Capital. Pai serves on the board of several startups, including Open, Bugworks, Darwinbox, Tracxn, Jupiter, Dozee, Licious and Betterplace.
Siddarth Pai– Founding Partner and Chief Financial Officer
As the founding partner and chief financial officer of 3one4, Siddarth has helped close more than 120 funding rounds and investments into over 35 different funds across private equity and public markets. He has invested in startups such as Better India, Licious, Faircent, YourStory, and BetterPlace.
Siddarth was recently appointed as the firm’s Environmental, Social and Governance (ESG) officer, where he’ll work on bringing the principles of ESG into 3one4’s investment and portfolio management. He also serves as the co-chair of the regulatory affairs committee at the Indian Private Equity & Venture Capital Association (IVCA).
Anurag Ramdasan– Partner
Anurag, who joined as principal at 3one4 Capital in 2016, was promoted to the position of partner in 2021. At 3one4 Capital, Anurag spends most of his time finding and sponsoring new investments and working with portfolio companies across growth, business and strategy. As the founder of Code for India, a non-profit organisation based in Mountain View, CA and Bengaluru, India, Anurag has leveraged his tech expertise to build comprehensive software systems for 3one4 that have optimised its interactions with startups.
Analysis
A total of 111 investments across 65 startups have been considered for this analysis, and the research is based on data from Crunchbase. The startups included are those for which adequate information exists, and this is by no means an exhaustive list of all the investments made by 3one4. The funding amount was available for 44 investments.
The startups have been classified according to various industries based on data from Pitchbook, and the sector classification is based on Global Industry Classification Standard (GICS). The sector classification is subjective and has been made considering the sector/industry that the startups closely resemble.
Of the total number of investments, 91% has flowed towards Indian startups, followed by the US-based startups taking up 7% and Singapore startups taking up the remaining 2%.
3one4 has made 23 investments (21% of the total) in startups belonging to the industrial sector. Top industries in this sector include human capital services (9 investments) and logistics (7 investments).
Founded in 2015, Darwinbox is a new-age human capital management platform that enables enterprises to automate day-to-day HR processes, simplify human interactions, and deliver actionable insights to build better workplaces. From Hyderabad, India, to Kuala Lumpur, Malaysia, the startup has 12 global offices, over 700 employees, and 1.5 million users across 90+ countries. The startup offers a range of services for workforce management, compensation, and talent management. Darwinbox’s innovative solutions include mobile HRMS and voice bot.
3one4 has participated in six funding rounds, from Darwinbox’s Seed funding in 2016 to the latest Series D round.
Bengaluru, India-based Ripplr, is a logistics and distribution platform that provides end-to-end logistics support using technology in an asset-light approach. The platform offers a plug and play system, data driven analytics, and operational visibility. It is present in over 40k retail locations, 17 warehouses and processes more than 100k orders per month.
From Seed to Series B, 3one4 has participated in three of its funding rounds between 2020 and 2021.
The communication services sector has attracted 21 investments constituting 19% of the total. Top industries include publishing (5 investments) and entertainment software (4 investments).
Kuku FM is a podcast platform that provides audio content in regional languages. The platform offers content in the form of book summaries, stories, audiobooks and learning courses available in six Indian languages.
3one4 has participated in three of its funding rounds, the latest being a Series B round in Mar 2022.
Founded in 2020, Mitron is a social short video platform that helps creators showcase their innovative videos online. The TikTok-like platform allows users to create, edit and share their videos while offering a library of top videos by other creators.
3one4 has participated in the Seed and Series A round of Mitron.
3one4 has made 19 investments in financial startups, constituting 17% of the total. Top industries include financial software (16 investments) and consumer finance (2 investments).
Jupiter is an Indian neobanking startup that offers new-age debit cards, helps users intelligently save for specific goals, track spending patterns, and earn rewards while doing so.
Between 2019 and 2021, 3one4 has participated in three of its funding rounds, with the latest one being a US$86 million Series C round in Dec 2021.
Founded in 2017, Streak is an algorithmic stock trading platform based in Bengaluru, India. The platform allows users to plan and manage trades without coding, thereby making strategic trading accessible and affordable. With Streak, traders can create strategies, backtest and deploy them. They can also create custom watchlists and quickly scan any sector.
3one4 invested in Streak’s Seed round in Jun 2019.
Summary
Overall, 3one4 Capital has made 111 investments across 65 startups, participating in funding rounds exceeding US$885 million. The firm has almost entirely focused its investments in India. A majority of the startups are still private (58), while six have been acquired or merged, and one startup has shut down. 3one4 has made 59% of its investments in the last three years, while the remaining belong to the period between 2015 and 2018. Staying true to its role, the early-stage venture capital firm has primarily focused on Seed-stage investments which account for 45% of the total, followed by Series A with 21% and Series B with 14%.
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