India Quotient's biggest tests to raise $80 million its fourth early-stage

India Quotient, the venture capital firm known for its early bets on content startup ShareChat and makeup brand Sugar Cosmetics among others, is in talks to raise its fourth early-stage fund of $80 million- its largest so far.

The fundraise is crucial for the firm amid changes in partnership and some churn among its investors and indicates rising interest for Indian internet startups and experienced domestic fund managers.

"We have filed with SEBI for approval for the fund, and will be the largest fund doing idea-stage and paper plan deals consistently in India. We want to invest in 40 companies from this fund, and will have an average cheque size of $500,000," Lunia said.

The new fund will also be one of India Quotient's biggest tests so far because two of its large LPs from earlier cannot participate in this fund. Gulf billionaire BR Shetty- one of the fund's earliest backers- is currently battling fraud and forgery charges. In its third fund in 2018, India Quotient had also brought in a number of Chinese entrepreneurs and investors to back its fund. Because of the government's anti-China stance, they won't invest in this fund. Lunia however is not worried.

India Quotient's other backers include Flipkart co-founder Binny Bansal, MakeMyTrip founder Deep Kalra and Paytm founder Vijay Shekar Sharma,

Founded by Anand Lunia and Madhukar Sinha in 2012, India Quotient started with a $6 million debut fund, which is followed up with a $20 million second fund in 2016 and a $60 million third fund in 2018. In 2018 it also raised a $40 million opportunity fund- earmarked to back its best-performing portfolio companies in follow-on rounds.