Exclusive: Spring Marketing Capital Launches INR 500 Cr Fund For Growth Stage Startups

Growth stage investment firm Spring Marketing Capital has launched its second fund with a target corpus of INR 500 Cr (about $54Mn), sources told Inc42.

The new fund is receiving strong support from the firm’s existing limited partners (LPs) and it expects to mark the first close of the fund by March this year at INR 150 Cr, the sources added.

Spring Marketing Capital’s founding partner Raja Ganapathy confirmed the launch of the second fund with Inc42 but declined to comment on its size.

The firm, cofounded by former Sequoia Capital chief marketing officer Ganapathy, along with advertising veterans Arun Iyer, former chairman of Lowe Lintas, and Vineet Gupta, former group chief executive of DDB Mudra, has fully deployed its first fund, which was launched in 2019 with a corpus of INR 150 Cr.

“We had raised our first fund on a Zoom call during the pandemic which is fully deployed now and comprises a very strong portfolio of 11 companies, including Purplle, Mosaic Wellness, Jar, GIVA, Agilitas, and the most recent investment – Shree Anandhaas,”, Ganapathy told Inc42.

Earlier this week, D2C athleisure brand CAVA raised INR 40 Cr in its Series A round, with Spring Marketing Capital also co-investing.

Ganapathy said the second fund will follow the investment thesis of the first – investing in startups that are post-product-market fit and 3-5 years away from major liquidity events.

With the second fund, the firm plans to deepen investments in consumer brands across categories like fintech, health, lifestyle, and retail, he added.

Explaining Spring Marketing Capital’s investment philosophy, he said the firm operates “marketing capital” funds that provide brand expertise rather than competing on cheque size with other VC firms, enabling it to write smaller cheques even in growth rounds.

Talking about performance of the maiden fund, Ganapathy said it received a 5X return on its partial exit from beauty ecommerce unicorn Purplle.

“We are also in the process of selling our 50% stake in another portfolio company by March and are expecting a 6X return on the quantum of investment in that firm,” he added.

The fund launch comes at a time when the Indian startup ecosystem continues to grow at a rapid pace. Investors are launching new funds to back innovative Indian startups to capitalise on the opportunities across sectors.

Funds worth over $12 Bn were launchedfor the world’s third-largest startup ecosystem last year.

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