The solo GP (general partner) firm will focus on early-stage investments backing 15-20 startups with initial cheque sizes in the $1-8 million range, one of the people said. “The primary focus will be on early-stage startups, but the firm will remain open to investing selectively in follow-on rounds,” the person added.
ET in March 2024 reported that Verma was leaving Nexus and planning to launch a new fund.
Another person said Northpoint Capital has received commitments from global endowment funds, foundations, fund-of-funds and institutional investors.
“The firm sees an opportunity emerging from technology and AI becoming deeply embedded across sectors ranging from financial services and logistics to healthcare, manufacturing, and consumer products,” the person said, adding that Northpoint Capital will focus on backing category-creating startups at a very early stage.
As much as 90% of the fund is international with the rest coming from domestic family offices and individual investors. While Northpoint Capital has been registered with the Securities and Exchange Board of India, it has yet to receive some regulatory approvals to begin onboarding limited partners, or investors in the fund.
Verma did not respond to ET’s queries.
Verma’s 13-year stint with Nexus where he was a managing director saw him invest in startups like enterprise unicorn Postman, edtech startup Unacademy and Infra.market, which sells construction materials. Verma focused on consumer tech, enterprise, SaaS, healthcare, and business-to-business commerce verticals, and had backed around 80 startups during his tenure at Nexus.
Over the past year, several senior-level departures have happened at Indian VC firms, including of Shailesh Lakhani, Abheek Anand and Piyush Gupta at Peak XV Partners, Mirae Asset India Venture Investments’ Ashish Dave, and General Catalyst’s Anand Chandrasekaran.
The $150 million fund close for Northpoint Capital will further add to the capital available for investment by the VC ecosystem, which has been cautious about deploying funds despite racking up big sums of capital.
Over the last year or so, firms including Accel India ($650 million), Bessemer Venture Partners ($350 million), Stellaris Venture Partners ($300 million), Cornerstone Ventures ($200 million) and Prime Venture Partners ($100 million) have closed or are in the process of raising their new India-focused funds even as deployment has been cautious.
A recent report by investment banking firm DC Advisory underscored that the fundraising landscape has become “increasingly competitive, with limited partners placing more emphasis on large, established funds with a history of strong performance”.
“Funds that struggled to demonstrate strong DPI (distribution to paid-in capital), however, will likely continue to face difficulties raising new capital, as investor confidence remains focused on past returns,” it said.
DPI is a metric that measures the realised profits that have been distributed by a fund back to its investor base.
Larger firms such as Peak XV Partners and Fireside Ventures are also looking to raise capital for new funds. Peak XV Partners, the rebranded entity that split from Silicon Valley’s marquee venture capital firm Sequoia Capital two years ago, is set to raise its first independent fund with a target corpus of $1.2-1.4 billion, ET reported on April 25, citing people familiar with the matter.
