Consumer-focused VC firm Sauce.VC marks final close of third fund at Rs 365 crore

Sauce VC, a New Delhi-based consumer-focused venture capital firm, has marked the final close of its third fund, securing Rs 365 crore.

The fund exceeds its initial target corpus of Rs 250 crore. The fund saw a significant oversubscription, attracting demand for about Rs 700 crore, according to founder Manu Chandra.

"This fund was oversubscribed 3x in four weeks and it was overwhelming and tempting to raise more but right sizing was important. So my apologies to all LPs who we could not accommodate in this fund. We hope to start working with you in the future," Chandra wrote in a LinkedIn post.

"The decision to downsize was not easy but is more a reflection of how we intend to build Sauce.vc for the very long term while staying true to our stated strategy. I feel as an early stage fund we have a small but valuable role to play along with later stage investor partner," Chandra added.

Who are the investors?

Sauce VC’s third fund has raised capital from prominent investors, including Infosys co-founder Kris Gopalakrishnan’s family office, Pratithi Investments, Marico promoter Harsh Mariwala’s Sharrp Ventures, Singularity Ventures, and Saison Capital.

Notably, 95% of the capital came from domestic investors, with nearly 80% contributed by existing sponsors from Sauce VC’s previous funds.

"We were overwhelmed by the response from new and old investors for our new Fund. We were unable to accommodate a lot of new investors as we had to prioritize existing LPs. We did however open up some new strategic LP partnerships that we are extremely happy about. While it is tempting, but we decided not to accept more capital than we can deploy in a disciplined way, while staying true to our stated strategy.” Chandra said in a statement.

Investing in 12-15 companies

Sauce VC continues to focus on early-stage consumer brands and platforms, investing in pre-revenue or idea stages.

The firm’s strategy involves making 12-15 investments, with an average cheque size of Rs 5 crore, and reserving about 75% of the fund for follow-on investments. 

Previous funds and performance

Since its inception, Sauce VC has launched multiple funds. Its first fund in 2019 raised Rs 60 crore, and its second fund in 2021 secured Rs 158 crore.

Additionally, the firm raised a Rs 263 crore continuity fund to back successful companies from its earlier funds. These funds have supported brands like Mokobara, The Whole Truth, and Supertails.