Singapore-headquartered Grayscale Ventures has secured the first close of its debut fund, raising nearly half of its $20 million target.
Founded by Siddharth Verma and Nikhil Kapur, the 10-year term fund intends to invest in 15-20 startups in the pre-seed stage. It has invested in several startups, including Localwell, a mobile SaaS startup for Indian pharmaceutical retailers, and Olvy, a cloud-based feedback SaaS platform provider.
Before the product-market-fit stage, Grayscale Ventures typically invests in startups that have some version of a product ready. Occasionally, according to Verma, it might even consider companies that remain at the pre-product stage.
There are limited partners in it worldwide, including Japan, the United States, India, and other Southeast Asian countries. Most limited partners (LPs) are operators and founders from companies like Zendesk, Hasura, Slack, GlobalWay, Nexus Venture Partners, and STRIVE.
“In early 2022, we started having conversations with potential LPs. What LPs found interesting was these spaces that are so deep… potentially the next wave of very large companies would come out of these themes,” said Verma.
The duo first met at the venture capital firm STRIVE in Tokyo while helping it deploy its Fund II and Fund III in India and Southeast Asia. Jointly, they invested in 25–28 start-ups in the business-to-business segment.
This was when they decided to set up a fund focusing on the Indian SaaS space. “Over time, we got the confidence that the investments we did at STRIVE are doing well. We invested $18 million-$20 million in the last six years. And now we’re sitting on 7X MOIC (multiple on invested capital) in India and Southeast Asia… that gave us the confidence to start our own fund,” says Verma.
“Our bet is more on the founders and their product-building capabilities, their understanding of the market (they operate in), and their product-led approach. These are a few ingredients we are on the lookout for while speaking with founders,” he added.
