New Delhi, June 16 -- Early-stage venture capital firm YourNest Venture Capital has formally closed its maiden investment vehicle more than a decade after launch, generating strong investor returns through a portfolio that included a unicorn, multiple acquisitions and several venture backed scale-ups, VCCircle has gathered.
The Gurugram-based investor had raised Rs 83.4 crore from 144 limited partners in 2012 and deployed the capital across 16 technology-enabled startups, including companies such as conversational AI unicorn Uniphore, enterprise software testing platform Opkey, rewards and loyalty infrastructure startup Twid, parenting content and community platform Momspresso, artificial intelligence startup Arya.ai and connected devices platform CoveIoT.
With the fund now fully wound up, YourNest's founding partners Sunil Goyal, Girish Shivani and Sanjay Pande said the maiden fund delivered a distributed-to-paid-in capital (DPI) multiple of 3.3x for direct investors, while generating a gross multiple of invested capital (MOIC) of 4.3x at the fund level.
Goyal told VCCircle that fund's exits generated a total of about Rs 350 crore.
The fund delivered an IRR of 19.9%, he added. This places it comfortably above Nifty's returns of roughly 10-12% over 2012-2026.
In a note to investors, the managing partners wrote that the fund was able to support 16 technology-enabled startups, 10 of whom went on to raise subsequent institutional rounds.
However, the number fell short of the firm's original ambition of delivering a 5x return over the fund's life.
"With the close of Fund I, and a DPI of 3.3x at the fund level, we realise we were unable to fully meet the promises we had made. We had started with the intent of delivering 5x returns over the fund tenure," the partners wrote in their note.
Some of the fund's biggest successes came from companies that later emerged as category leaders. Uniphore, one of YourNest's earliest investments in artificial intelligence, went on to become a unicorn backed by Nvidia and AMD. Enterprise software testing platform Opkey attracted investors including PeakSpan Capital, while rewards infrastructure startup Twid raised capital from investors such as Google, Rakuten, Peak XV Partners and Beenext.
The fund also benefited from strategic exits. Momspresso was acquired by Honasa Consumer owned Mamaearth, CoveIoT was acquired by Boat and Arya.ai was acquired by Aurionpro Solutions.
Among the strongest outcomes was a partial exit from Opkey, which generated a 16x return on invested capital and more than three times the fund's total investment in the company.
YourNest is among the earliest institutional investors focussed on seed-stage technology startups in India. The partners said that the experience of Fund I also prompted changes in the firm's investment approach.
While almost all of the maiden fund's capital had been deployed by the seventh year, subsequent funds reserved more capital for follow-on investments in top-performing portfolio companies and adopted a more measured deployment pace, they added.
The maiden fund is part of a series that also has Fund II and Fund III, aside from a continuation vehicle. The partners said its third fund is currently tracking a gross MOIC of about 2x despite deploying only 77% of committed capital within four years of launch.
YourNest has made the final close of its continuation vehicle YourNest Continuum Fund I, which is to provide additional growth capital to some of its most promising portfolio companies. The firm raised Rs 400 crore for this fund, exceeding its initial target of Rs 300 crore. HDFC AMC Select Fund of Funds I anchored the vehicle.
The continuation fund supports mature deeptech startups from the YourNest ecosystem that require larger growth cheques beyond the traditional venture capital lifecycle. The vehicle allows existing investors to retain exposure to high-performing assets while providing liquidity options and fresh capital for portfolio companies entering their next phase of growth.
Published by HT Digital Content Services with permission from VC Circle.