RTP Global closes $1bn fund; one third of investments to be earmarked for India

NEW DELHI: Early stage venture capital (VC) firm RTP Global which has backed Indian startups like Cred, Rebel Foods and Khatabook has closed a new $1 billion fund. At least one third of the funds will be earmarked for India and the allocation for the market can go up depending on the potential of the investment opportunities, said Nishit Garg, investment partner at RTP Global in Asia.

Although consumer tech and fintech spaces have traditionally been the core areas of focus for the firm, a considerable portion of the new fund would be deployed in areas like AI (artificial intelligence), climate tech and EV (electric vehicle). “We hope to write a first cheque from the fund in India in the AI space. Today, you cannot be a fund who is not talking about AI. Probably, we will do a lot more core AI investments in the US and more of AI enablement (startups building AI solutions for businesses) from India,” Garg told TOI in an interview.

Of the $1 billion, about $660 million will be allocated for new investments in seed and series A startups globally while $340 million will be used to make follow on investments in this fund’s well performing portfolio companies. Although the global economic downturn has impacted exits for the VC firm in the past year, the size of the new fund RTP IV is 50% higher than its previous fund RTP III closed in 2020. This has been made possible because of the decent returns the firm made from its previous investments through 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,” Garg said.

The downturn has impacted cheque sizes but has pushed startups to focus on the business fundamentals. “Many of our portfolio companies are in much better shape today in terms of burn, monetisation. A lot of high burn business models have been pivoted to tackle the uncertainty,” Garg said.

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