Kae Capital’s maiden fund wins big from part exits in Porter & HealthKart
Kae Capital’s $25 million debut fund has increased capital invested in Indian and overseas vehicles by more than 5x, following a series of recent secondary transactions in Porter and HealthKart, two of its oldest bets.
In its statement, the company stated that the fund’s India vehicle has fully exited with a 3.6 times distribution to paid-in capital (DPI) as of September 2023, while its international vehicle is on track to provide more than 5 times returns. DPI, an important metric for venture funds, reflects the cash returned to investors based on their commitments.
“When we raised Fund I, seed investment in India was almost unheard of. Our goal was simple: to support extraordinary founders in their early stages and be there for them through cycles,” said Sasha Mirchandani, co-founder of Kae Capital.
Kae’s fund performance comes at a time when limited partners (LPs), or investors, are increasingly looking at the track record of general partners who manage those funds before committing more money. This has prompted investment firms in India to consider cashing out some of their bets to return money to their LPs.
While the India vehicle of Kae’s first fund, which was launched in 2012, will be closed in 2023, the global vehicle has been extended for a few more years. While Porter has already returned more than 2x the fund, HealthKart has returned the fund on its own, even though Kae continues to hold shares in both companies.
“Fund I’s DPI is not just a number, it is a symbol of what is possible when early belief meets enduring partnership. We are proud to have played a role in shaping some of India’s most exciting companies, and even prouder of the trust our founders and LPs have placed in us. This is just the beginning,” said Gaurav Chaturvedi, general partner at Kae Capital.
Portfolio powerhouses
Kae’s first fund backed 32 companies in India and the US. Other notable portfolio successes include high multiple exits such as Dailyround, Fynd, Airwoot and Eventifier, as well as 1MG and Certa.
The fund’s performance was boosted by the addition of $900 million in follow-on capital to its portfolio, increasing its total enterprise value to over $2.7 billion.
Kae was built with the aim of capturing bold ideas at an early stage and backed by patient capital. Over the years, the firm launched a second and third fund of $50 million and $100 million, respectively.
The second fund, which has already returned the secured amount, has invested in companies such as Zetwerk, Nazara, Snapmint, and has clocked exits with more value to be realized in Halaplay, Fynd and Numberz. The investment firm said the third fund has also seen strong momentum from its investments in companies such as Traya, Foxtale and RecommerceX.
Expands footprint, improves focus
Kae has backed three unicorns across her three funds; early checks contributed $7.7 billion in cumulative enterprise value and over $2 billion in follow-on capital.
Initial check size increased from US$500,000 to US$1-1.5 million, reflecting increased confidence and scale.
Currently, Kae manages over $250 million across 90 startups; It remains sector agnostic but has a sharp focus on seed-stage opportunities in artificial intelligence, intelligent automation, manufacturing flexibility and deep technology.
