Startup News

Blume Ventures invests Rs 350 crore in secondary fund with Avendus Capital

According to reports, venture capital fund Blume Ventures has raised Rs 350 crore.

Moreover, this is on account of a new secondary fund which it has launched with Avendus Capital.

It aims to purchase it’s own holdings in older portfolio companies to double down on some of its existing investments.

The new fund, Fund 1x has acquired six of the Blume I portfolio companies originally packaged into a portfolio.

These companies include GreyOrange, Purplle along with three growing B2B stars – Exotel, IDfy, and WebEngage respectively.

The investors put their money for a fixed duration of 10 years in most venture capital and private equity funds.

Also, these investors sometimes sell their stake in a fund to other investors in a secondary transaction.

During the tenure of 10 years, they are expected to invest and return profits to their LPs.

However, the LP structure is the foundation of this transaction working out.

LPs, or limited partners refer to high net worth individuals, family offices, or pension funds who invest in venture funds.

An amalgamation of primary and secondary investments is integral to Blume’s investment recast.

This fund enables Blume’s Fund 1 and Fund 1A investors to witness gross cash returns of over 2x.

Meanwhile, investors can expect an additional 1-2x from the residual positions that were not a part of this secondary portfolio.

Moving forward, Fund 1x will have an investment period of two years besides a five-year life cycle.

The approval of LPs is required to extend the investment period up to seven years.


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