Raghav Bahl, former Head of Investments at Alibaba Group India, and Soham Avlani, ex-Partner at 9Unicorns, announce PROMAFT Partners, a Rs 1000 crore venture capital fund.
Raghav was Vice President at Bessemer Venture Partners, a worldwide firm with offices in the US, Israel, and India, before directing Alibaba investments. Soham was a public market investor.
The founding General Partners invested in and managed substantial portfolios, including Swiggy, PayTM, BigBasket, XpressBees, TaxiForSure VideoVerse, and PharmEasy. Their portfolio has made over US$1Bn in profitable India cash exits.
PROMAFT invests in firms with excellent ‘Product-Market-Fit’ and consumer love. Due to its tight collaboration and mentoring of entrepreneurs, the sector-agnostic fund plans 10-12 investments.
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The General Partners will use their worldwide investing experience in China, SEA, and Europe to aid businesses with Go-To-Market, company strategy, hiring, and finance.
“Growing without product-market fit is like driving fast in the wrong direction. And product-market-fit without sustainable competitive advantage doesn’t create shareholder value. We encourage our entrepreneurs to grow slowly, while investing in the core fundamentals of the business. We plan to make 2-3 investments per year. We are backed by prudent investors which gives our entrepreneurs the advantage to build for the long term.” says Raghav Bahl.
The fund’s portfolio firms will be mentored by top Indian family offices and founders of PayTM, Zomato, Browserstack, Livspace, PharmEasy, and VideoVerse.
The General Partners consider this a ‘double trophy’ investment vintage. Growth at any cost was the norm in 2020-21 due to high valuations. Due to investors’ high valuation needs for rapid expansion, entrepreneurs often raised more money.
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This growth typically required large discounts, which increased capital needs. Even smart entrepreneurs have to raise additional money to compete with well-funded rivals. This cycle abruptly terminated with rising interest rates.
“We believe that this vintage encourages entrepreneurs to develop capital efficient businesses while the absence of large funds has resulted in valuations to sober down. We remain excited about this environment as it provides for a highly attractive ‘risk-return profile’ for both investors and entrepreneurs.” says Soham Avlani.
The fund hopes to build long-term success with a solid deal flow pipeline and investor engagement.
