Nikhil Kamath and Collective Artists Network launch new VC fund with Rs. 150 crore initial investment

Nikhil Kamath, co-founder of Zerodha launched Gruhas, an India-focused VC fund along with Abhijit Pai three years ago. Kamath has now launched another fund with talent management and influencer marketing firm Collective Artists Network in a bid to back consumer brands.

Gruhas Collective Investment Fund will focus on areas like fashion and lifestyle, health and wellness, coffee and beverages, personal care, and food services. The fund has been launched with an initial investment of Rs. 150 crore.

In a conversation with Moneycontrol, Vijay Subramaniam, founder and group CEO of Collective Artists Network said that they have locked in their first five investments. Additionally, Subramaniam and Kamath are underwriting 30 to 35 percent of the fund themselves. The duo, through the fund, are looking to invest up to a million dollars in early stage companies.

Initial investments of the alliance include a sexual wellness company and an inner-wear brand among others.

”The timing (of the fund launch) is opportune. Right now we are in a sweet spot where the funnel for PE/VC (private equity/venture capital) money coming into India is reduced quiet a bit. So, the opportunity that exists today wasn't there 12 months ago. The cost of foreign capital coming in will remain reasonably high for some time, so we think the opportunity is there and timing is right. We expect the fund to be much larger in the coming years. While the first couple of investments are done already, the majority of investments will be done in the next 12 months," Kamath told Moneycontrol.

Through the new fund, they are looking to build a bridge between Bengaluru and Mumbai, Kamath added. "We are removing all intermediaries for distribution to come together with technology. We believe it would lead to more efficient companies. And the fund is a means of facilitating that,” he said.

Subramaniam said that idea behind the fund was to marry the backbone of soft power of India which is entertainment, media and sports with venture capital.

Kamath added, ”We believe in the India story and it will grow our dominance as a domestic consumer market, as a manufacturing market, and as a service-oriented market. A lot of these different domains of the Indian economy may not have done too well for the last six months or, maybe, three years but, 10 years down the line they will be bigger and we are working with a long-term outlook. Unlike foreign VCs, we are more long term partners to people.”