Backing the Next Wave of Revolutionary Founders Blume is particularly focused on sectors like SaaS, fintech, AI, climate tech and environment.

Blume Ventures, a Bengaluru-based venture capital firm that raised around USD 290 million in its fourth and largest fund in December 2022, claimed to have set aside cash from its existing funds for follow-on rounds, but exclusively for its current portfolio businesses.

"At the same time, we have made regular new investments over the past 18 months and will continue to do so. We are actively evaluating new startups. We are open to new investments across many sectors, but certain companies are likely to gain investment priority," according to Blume Ventures Partner Ashish Fafadia.

"We maintained a disciplined approach and avoided fast and excessive capital deployment during the period when the market was experiencing significant hype. But given the state of the economy right now, we anticipate more realistic investment opportunities. In particular, at the growth stage or late stage, our focus is on supporting firms that can demonstrate a frugal approach to growth while driving them towards profitability," Fafadia continued.

Blume is particularly focused on sectors like SaaS, fintech, AI, climate tech and environment.

The firm asserts that it has provided a variety of support services to its portfolio companies, where they believe the business model has evolved. "For instance, we try to help with debt infusion so that the runway can be extended. If we believe that there's no way to sustain or save the business, then we will need to go deeper to evaluate a closure. However, if the businesses are doing well, we also aim to arrange a bridge round or provide help through M&As," said Fafadia.

Fafadia has observed a sustained level of momentum and a healthy pipeline of opportunities at this early stage. "While there has been a slight decrease in the overall volume of deals, the quality of founders approaching us remains strong," he stated. "We are seeing "value-based deals" in the mid- and growth-stages, which means that investments are available for businesses that are fairly valued and have sound business fundamentals. Recently, Series B and C funding has been successfully obtained by such companies in our portfolio."

In the near future, late-stage funding is likely to see the most difficulties, according to Fafadia. "Unless companies can achieve profitability or sustain it even without raising new public rounds, we predict some consolidation to happen at that stage. We expect the possibility of valuation revisions in situations where companies choose to stay private rather than go public," he emphasised.

Stats:

No of Startups Invested in: 175+ investments since inception (21 in FY 23)

No of Exists: 30+ since inception (3 in FY 23)

Focus Sectors: Edtech, Fintech, Health, Commerce and Consumer Internet, Robotics and AI, SaaS and Enterprise Software

Fund Size: Blume Ventures India Fund IV (~USD 290 million), Blume Ventures India Fund III (USD 102 million), Blume Ventures Fund II (USD 60 million), Blume Ventures Fund I (USD 20 million)

Ticket Size: Typical ticket size for Fund IV is USD 1-3 million for a first cheque