Stellaris Venture Partners Launches $300 Million Fund Focused on Early-Stage Investments

A Fast-Growing Venture Capital Firm Targets Diverse Startup Sectors

Venture capital firm Stellaris Venture Partners has successfully raised its third India-dedicated fund, totaling $300 million. This milestone marks one of the fastest scale-ups for a domestic early-stage firm focusing on seed and Series A financing.

Known for backing direct-to-consumer personal care brand Mamaearth and software-as-a-service platform Whatfix, Stellaris intends to allocate the new capital to invest in 25-30 startups across various sectors, including consumer technology, enterprise software, artificial intelligence, and financial services.

The Foundation of Stellaris

Established in 2017 by former Helion Venture Partners executives Ritesh Banglani, Alok Goyal, and Rahul Chowdhri, Stellaris is part of a new wave of funds that emerged following the first bull cycle in India’s startup ecosystem. Their first fund raised $90 million, and the second saw a significant jump to $225 million.

Strategic Vision for Growth

In a conversation with ET, Banglani discussed the rationale behind the size of the third fund. “For the strategy that we’re pursuing, which focuses on seed and Series A in India—along with substantial follow-on reserves—we believe $300 million aligns perfectly with our goals. Although there was significant interest, our priority is to ensure returns for our LPs (limited partners),” he stated.

Capital Composition and Sources

While Stellaris’s inaugural fund sourced a large share of domestic capital, the latest fund’s corpus primarily consists of commitments in US dollar-denominated capital. This includes contributions from university endowments, foundations, pension funds, and funds of funds, according to Banglani.

Mamaearth and the Path to Public Markets

For Stellaris, Mamaearth, which went public in November 2023, has proven to be a significant return generator. On an investment of ₹25 crore, the firm has realized approximately ₹800 crore in cash exits to date while still retaining an unsold stake worth more than ₹200 crore.

Banglani indicated that Whatfix is another potential candidate for the public market, having recently closed a $125 million funding round at a valuation of $900 million. Stellaris was pivotal in leading Whatfix’s $3.6 million Series A round back in 2017 when its valuation was just $12.3 million.

Future Public Market Candidates

Chowdhri highlighted that Propelld, an NBFC in the education lending sector, could also be poised for an IPO in the future. “We believe in investing in businesses with sound economics,” he explained.

“Typically, a venture portfolio will comprise 10-15% winner companies, and a few of those are likely to become public market candidates. We’re pleased that in our Fund-I portfolio of 19 companies, there are already three candidates for public markets, and several others showing promise,” Banglani added.

Successful Fund Performance

Banglani noted that Fund-I has delivered returns and distributions that place it in the top decile of venture funds globally, reinforcing Stellaris’s position in the competitive landscape.

Future Investment Focus

Chowdhri reaffirmed Stellaris’s commitment to early-stage investments, emphasizing that their strategy remains focused and specialized. “Many innovative opportunities will emerge in the early stages, leading to substantial outcomes in the next two decades,” he stated.

While Chowdhri is spearheading consumer investments, Banglani focuses on financial services ventures, with Goyal specializing in enterprise software. The firm has recently elevated Naman Lahoty, a principal who joined Stellaris in 2019, to the position of partner, emphasizing the importance of consumer investments.

Adapting to Growth

Banglani mentioned that while the focus areas among partners may be adjusted for the third fund, there is an ongoing need to expand the investment team to manage the firm’s growth effectively.

Conclusion

With a robust strategy in place and a clear focus on early-stage investments, Stellaris Venture Partners is well-positioned to capitalize on upcoming market opportunities while continuing to enhance returns for its investors.

Questions & Answers

1. What is the size of Stellaris Venture Partners’ latest fund?

The latest fund raised by Stellaris Venture Partners is $300 million.

2. Which sectors will Stellaris focus on with its new fund?

Stellaris plans to invest in sectors such as consumer technology, enterprise software, artificial intelligence, and financial services.

3. Who are the founders of Stellaris Venture Partners?

Stellaris was founded in 2017 by Ritesh Banglani, Alok Goyal, and Rahul Chowdhri.

4. Can you name a successful investment by Stellaris?

Mamaearth is one of Stellaris’s successful investments, having recently gone public and generating significant returns for the firm.

5. What investment stage does Stellaris focus on?

Stellaris primarily focuses on early-stage investments, particularly in seed and Series A rounds.