Whiteboard Capital closes the second fund at 300 million lei

Venture capital fund Whiteboard Capital, known for its early stage investments in fintechs such as Cred, Jupiter and Dezerv, as well as consumer brands such as Damensch and NatHabit, closed its second fund at 300 million lei, double of its original target of Rs. 150 million.

The firm, which has already returned 1x to its investors, holds an unrealized earnings of around 6x from its first fund, having invested in around 45 startups from a total corpus of $10 million, told ET Anshu Prasher, partner at Whiteboard Capital. The first fund made exits from eight startups, either partially or fully.

The company’s second fund closed in December 2023, although this development was not previously reported.

Unlike other venture capital firms, Whiteboard Capital differentiates itself by combining the roles of an incubator and a seed fund. It has an operations team deployed in portfolio companies for months, working in areas such as operations, data analytics and technology.

On August 14, ET reported that Whiteboard is one of the incubators behind the sportswear brand launched by retired Indian cricketer Sachin Tendulkar and former Swiggy Instamart chief Karthik Gurumurthy. The firm used a similar incubation approach with ApnaKlub, a business-to-business wholesale platform for consumer goods.

Fund-II, which has already started deploying capital, includes several family offices and domestic institutions as limited partners (LPs). It plans to invest in approximately 50 companies, with a significant focus on follow-on investments from its existing portfolio.

Read also | VCs Street Trade for Fast Trade, D2C Success “In Fund-II, 30-35% of deployable capital will be directed to new controls and about double that is reserved for continuation of (existing) companies… In Fund-I , one of the things I think we could have done better is we could have written more follow-up checks into the portfolio companies. But due to lack of capital, we could not do that. So, we had to be more judicious with subsequent investments,” Prasher told ET.

This strategy aligns with a broader trend among early-stage investors raising larger funds to focus on later investments that gain deeper involvement in portfolio companies.

Whiteboard Capital was founded by Sandeep Tandon, co-founder of mobile recharge platform Freecharge, and Cred founder Kunal Shah. As the name suggests, Whiteboard Capital reflects the company’s philosophy of investing in founders even before their business plans are fully formed, helping them refine their products. This strategy allows Whiteboard to invest at small enterprise valuations. Most of their investments took place when the startups were less than two months old or not yet incorporated.

While Whiteboard was securing its Alternative Investment Fund (AIF) authorization for the Securities and Exchange Board of India (Sebi), Shah left the firm to join Sequoia as an advisor, ending his involvement with Whiteboard Capital. After Shah’s departure, Tandon brought in Prasher, a former early-stage investor at Innoven Capital and Saama Capital, as a partner.

Currently, approximately 40% of Whiteboard Capital’s investments by volume are in the consumer sector, including both consumer brands and consumer technology, while the remaining 30-35% of the portfolio is allocated to financial services companies.

The firm classifies its portfolio investments into two types: core companies and non-core companies. For the second fund, core companies are defined as those in which the firm owns more than 7.5% of the shares and has invested more than $200,000.

“We will see more $400-750 million exits in India and potentially some $3-5 billion exits, which is why we have consciously stuck with this strategy of coming in extremely early, taking that bet or chance on the founders.” Prasher said.

Discussing the influx of tech venture capitalists into the consumer space, Prasher said it creates a tailwind for portfolio companies, helping them get better attention and pursue investment as they get closer to product-market fit.