The agency is presently elevating its Fund II of $200 million, specializing in SaaS and expertise but in addition bullish on logistics and distribution. The VC anticipate to mark its first shut of the fund in June this 12 months and its remaining closure by March of 2025.
“There’s a number of headroom right here to create efficiencies whereas organising a primarily unorganised sector,” mentioned Prasad.
The agency is homegrown business-to-business (B2B) SaaS startup that has way more to supply to giant enterprises, which is why it’s doubling down on this section with a bigger quantum of investments, he famous.
So far, Cornerstone Enterprise Companions has invested in 21 SaaS startups from the primary fund with a mean funding worth in every startup being within the vary of $2-3 million.
On the efficiency of the primary fund, Prasad mentioned the portfolio of startups has witnessed a 4.5X in income progress. With the second fund, Cornerstone Ventures needs to goal to take a position on the late-stage funding rounds.
“We’ll put money into the vary of $5-7 million from the second fund largely at Collection A and B levels of funding,” Prasad, Managing Companion, Cornerstone Ventures. As well as, Cornerstone Ventures hopes to hunt funding alternatives on the late-stage funding rounds.
Prasad famous that the startup ecosytem noticed a shift when B2B enterprise tech companies began garnering consideration. “We noticed the emergence of a brand new class of founders who had been skilled professionals with sturdy area experience after which we determined that it was a great time to construct a B2B fund in India,” says Prasad.
He believes that the dimensions of the SaaS startup ecosystem in India will solely get larger. A report by Bain & Co mentioned it expects Indian SaaS firms to collectively attain $35 billion in ARR and seize 8% of the worldwide SaaS market within the subsequent 5 years.
He famous that generative AI (GenAI) is predicted to create new enterprise alternatives, and enterprises are eager to undertake the most recent applied sciences.
“ We’re seeing a transition from subscription-based fashions to value-sharing codecs. As an alternative of the standard per-user, per-month fee mannequin, enterprises right now assess the worth introduced by a SaaS answer, say, a 3-10% income improve in a monetary 12 months. This new-age pricing technique has unlocked substantial worth for SaaS firms and counters commoditisation by aligning income with the worth chain,” he mentioned.
By way of valuation, he mentioned Indian SaaS is less expensive than its international counterparts, with valuations starting from 5-7x recurring income, considerably decrease than the a number of of 12-15x seen within the US. The agency focuses on vertical alternatives, that focus on/cater to giant enterprises for sustained progress.
“Like Fund I, about 40% of our firms will obtain follow-on investments. We goal to take care of a portfolio measurement of 15-20 firms, focussing on Collection A and B offers and a few provisions for late-stage investments,” he mentioned.
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