Raghav Bahl, former Head of Investments at Alibaba Group India, and Soham Avlani, ex-Partner at 9Unicorns, introduces the launch of a Rs 1000 crore venture capital fund, PROMAFT Partners. Prior to leading investments for Alibaba, Raghav was Vice President at Bessemer Venture Partners, global fund with presence in US, Israel and India, while Soham was a public market investor.
The founding General Partners have been involved in investing and managing large portfolios, which included brands such as Swiggy, PayTM, BigBasket, XpressBees, TaxiForSure VideoVerse, and PharmEasy. Their portfolio has returned over US$1Bn in profitable cash exits from India.
As the name PROMAFT suggests, the fund will look to invest in companies that have proven exceptional ‘Product-Market-Fit’ and have proven that consumers love their product or services. The sector-agnostic fund plans to make 10-12 investments as it allows them to work closely, and mentor entrepreneurs. The General Partners plan to leverage their global investing experience across China, SEA and Europe to help startups in developing Go-To-Market and business strategy, hiring and financing.
"Growing without product-market fit is like driving fast in the wrong direction. And product-market-fit without sustainable competitive advantage doesn’t create shareholder value. We encourage our entrepreneurs to grow slowly, while investing in the core fundamentals of the business. We plan to make 2-3 investments per year. We are backed by prudent investors which gives our entrepreneurs the advantage to build for the long term.” says Raghav Bahl.
The fund is backed by leading Indian family offices and founders of leading Indian internet companies such as PayTM, Zomato, Browserstack, Livspace, PharmEasy, and VideoVerse who will also double-up as mentors for the fund’s portfolio companies.
The General Partners believe this period represents a ‘double trophy’ investment vintage. In 2020-21, valuations were high, and growth at any cost was the norm. Entrepreneurs had to frequently raise more money, driven by investors’ high valuation demands for rapid growth. This growth was often achieved through heavy discounts, fueling further capital needs. Even sensible entrepreneurs were forced to raise more funds to compete with well-capitalized competitors. This cycle ended abruptly with rising interest rates.
“We believe that this vintage encourages entrepreneurs to develop capital efficient businesses while the absence of large funds has resulted in valuations to sober down. We remain excited about this environment as it provides for a highly attractive ‘risk-return profile’ for both investors and entrepreneurs.” says Soham Avlani.
With a robust deal flow pipeline and continued investor interest, the fund aims to lay a strong foundation for its long-term success
