Early-stage venture capital firm RTP Global, known for backing successful Indian startups such as Cred, Rebel Foods, and Khatabook, has announced the closure of a new $1 billion fund. With a strong commitment to the Indian market, at least one-third of the funds will be specifically earmarked for investments in India, and this allocation may increase depending on the potential of investment opportunities, according to Nishit Garg, Investment Partner at RTP Global in Asia.
While consumer tech and fintech have traditionally been the firm’s core areas of focus, a significant portion of the new fund will be deployed in emerging sectors such as artificial intelligence (AI), climate tech, and electric vehicles (EV). Garg stated, “We hope to make our first investment from the fund in India’s AI space. Today, you cannot be a fund that is not talking about AI. We may focus more on core AI investments in the US and AI enablement from India, where startups are building AI solutions for businesses,” Garg revealed in an interview with TOI.
Out of the $1 billion fund, approximately $660 million will be allocated for new investments in seed and Series A startups globally, while $340 million will be used for follow-on investments in the fund’s well-performing portfolio companies. Despite the global economic downturn impacting exits for the VC firm over the past year, the size of the new fund, RTP IV, is 50% larger than its predecessor, RTP III, which closed in 2020. This expansion is largely attributed to the decent returns the firm has achieved from its previous investments over the years.
“The source of our capital is our returns from previous investments. In the past 20 years, one in 10 of our portfolio companies have become unicorns globally,” highlighted Garg. While the economic downturn has influenced investment sizes, it has also driven startups to focus more on solid business fundamentals. “Many of our portfolio companies are in much better shape today in terms of burn and monetization. A lot of high burn business models have been pivoted to tackle the uncertainty,” added Garg.
RTP Global’s new fund represents a significant boost to the startup ecosystem, particularly in India, which has witnessed a surge in entrepreneurial activity and innovation across various sectors. The commitment of a notable venture capital firm like RTP Global will provide emerging startups with access to capital and valuable expertise to fuel their growth.
The firm’s track record of backing successful startups and its focus on emerging sectors like AI, climate tech, and EV align well with the changing dynamics of the global market. The infusion of capital from RTP Global’s fund will likely support the development of innovative technologies and business models, driving economic growth and job creation in India and other markets.
As RTP Global begins deploying its new fund, industry stakeholders will closely watch the investment decisions and strategies adopted by the firm. The positive outlook on India’s startup ecosystem and the increased availability of capital will further enhance the country’s position as a vibrant hub for innovation and entrepreneurship.
The success of RTP Global’s investments in the coming years will not only contribute to the growth of individual startups but also shape the overall trajectory of the startup landscape, fostering a culture of innovation and disruption. With the right support and resources, Indian startups have the potential to make a significant impact on both the domestic and global stages, and RTP Global’s new fund represents a significant step forward in realizing this potential.
