Dear Investor,
ALL AROUND US, a ‘funding winter’ prevails across the late-stage startup eco-system. Funding in early-stage startups continues – albeit at more attractive valuations. Nevertheless, our disciplined approach of investing in DeepTech, early-stage, B2B focused startups continues to weather this storm, and is demonstrating resilience as is evident from the August 2022 Nasscom report.
Funding in DeepTech companies has increased by ~50% in Q122 vs Q121. This is also validated by what we witness on the ground: our engagement with startups focused on disrupting the status quo is stronger than ever, and we are in a position to cherry-pick high-quality startups at reasonable valuations. This, coupled by our unrelenting focus on infusing Nurture Capital will ensure that YourNest’s portfolio remains well protected from the ongoing value correction cycle.
As anticipated, our deal flow pipeline has been strong: we have made investments in Subconscious Compute (SubCom), VTION and Wiom; two others opportunities are at the transaction stage. Meanwhile, we continue writing cheques to winners from our existing portfolio.
Our focus has been on building resilience and extending the runway across our portfolio companies.
This will ensure they are able to navigate the downturn without compromising on their growth ambitions. To lengthen the runway, we are collaborating with our network across the co-investor landscape. Consequently, for eight of our 24 active portfolio companies, we have raised subsequent rounds since March 2022, strengthening confidence in our portfolio companies. We have also built relationships with marquee VCs who have a strong propensity to attract other leading VCs.
Adherence to our investment thesis continues to attract institutional investor interest, leading them to join us as LPs: as a result, 90% of Fund III has already been subscribed, and we are contemplating exercising the green shoe option, to cater to the demand from additional investors.
Having strengthened the YourNest operating team at the beginning of this financial year, we have internally embarked on a journey to achieve performance metrics of earmarked top global VCs.
With our collective pedal to the floor, we are grateful to have your continued support and confidence as we manoeuvre the interesting times ahead.
Sunil K. Goyal
Managing Director & Fund Manager
November 18 2022