Ola, Razorpay backer Matrix Partners to raise $450 mn in new India-focused fund

Matrix Partners India, a subsidiary of US-based venture capital (VC) firm Matrix Partners, which has backed unicorns like Ola and Razorpay, among others, is looking to raise $450 million in its fourth India fund, according to the company’s filings with the US Securities and Exchange Commission.

Moneycontrol had reported in May last year that Matrix was looking to raise a $400 million India-focused fund. The fund will be the VC firm’s largest ever. Queries sent to partners of Matrix remained unanswered. 

Matrix’s proposed fundraise comes a week after Sequoia Capital, announced closing $2.85 billion in a new fund focused on startups in India and Southeast Asia. Out of the $2.85 billion, the VC firm said it will invest $2 billion across Indian startups. The $2.85 billion fund was Sequoia Capital’s largest-ever fund for the region, too.

Earlier this year, VC firms Accel and Elevation Capital had also closed their largest-ever India-focused funds.

Elevation Capital, which has backed the likes of Swiggy, Meesho, Paytm and Unacademy, had a fund for Indian startups with a corpus of $670 million. Accel, meanwhile, had raised its $650 million in a fund dedicated for Indian startups in March. The large fundraises have allayed fears of a looming funding winter for India’s startup ecosystem. 

VC firms have seen their Indian tech portfolio companies growing exponentially in terms of valuation over the last decade, thanks to the acceleration of digital adoption and rising consumer incomes.

Consequently, most of Matrix’s bets in India, too, have become lucrative, especially over the last two years. Matrix has been a prolific VC investor in India for almost two decades and has backed as many as eight unicorns in India. Six of eight unicorns, joined the coveted club, over the last two years, according to data from Tracxn Technologies. 

Some of Matrix’s biggest investments include Razorpay, Ola, Ola Electric, Dealshare, Oxyzo, Dailyhunt, FiveStar Business, and OfBusiness. Fintech unicorn Razorpay saw its valuation zoom to $7.5 billion last year. Dailyhunt, meanwhile, raised $805 million at $5 billion valuation. Matrix did not sell any of its shares in the round, the founders had said. 

However, the VC has not been able to materialise its on-paper gains to actual cash as the VC was looking to sell a portion of its stake in Ola’s parent ANI Technologies to existing investors for about $75 million, a key move to return cash to its own investors, Moneycontrol had reported last year. However, the deal seems to have not gone through owing to an overall slowdown in the global financial markets and technology valuations taking a beating.

Earlier this year, Moneycontrol had reported that Ola was planning to raise a new round of funding at a lower valuation.