Singapore-based venture capital firm Grayscale Ventures has on Monday announced the first close of their DevInfra and software as a service (SaaS) focused Pre-Seed fund.
Grayscale Ventures said in a statement that the ten-year term fund plans to invest in 15 to 20 startups at their pre-seed stage, essentially the first cheque into the company.
With a cheque size of $200,000 to $1 million, they target around 10 percent ownership in these companies, preferring to lead the rounds wherever possible or co-leading with other specialised funds.
The firm looks for founding teams that are product-led with strong developer capabilities.
The fund plans to focus primarily on developer infrastructure (DevInfra), artificial intelligence (AI) applications, and vertical SaaS.
“We come from development and product backgrounds, so we tend to understand what technical founders are building better than most generalist investors,” said Grayscale Ventures.
“Our portfolio founders find value in working with us as we support them in figuring out their product-market-fit and opening up market access in the United States and Asia Pacific (APAC),
“Our LPs are operators and founders from tech companies globally, and we leverage their support for our portfolio’s growth,” it said.
In terms of DevInfra, Grayscale Ventures said India is the second largest developer base in the world, soon to overtake the United States.
Developers in India have built infrastructure for scaled-up products used by 100 million+ users, making it a unique skillset globally.
Using these capabilities they are now building the next generation of infra companies focussed on other developers.
As for AI applications, Grayscale Ventures said generative AI is taking the world by storm.
In the past, SaaS systems were either systems of record or systems of engagement such as Salesforce or Slack respectively.
The next generation of SaaS systems will be systems of intelligence and this is where we’ll invest our capital.
On Vertical SaaS, Grayscale Ventures said small and mediun-sized enterprises (SMEs) have traditionally been laggards in tech adoption.
However, as a result of the pandemic, they have now started to adopt software in a meaningful way and we want to catch this wave early.
Grayscale Ventures is a global fund, domiciled in Singapore, with limited partners (LPs) from Japan, Southeast Asia, the United States, and India.
Most of the LPs are operators and founders of companies such as Slack, Zendesk, Hasura, GlobalWay, Nexus, STRIVE, Apollo Munich, UOB etc.
The fund held its first close in the fourth quarter of 2022 with half of the target fund already raised.
Grayscale Ventures has already invested in a few SaaS companies including Olvy, a product feedback lifecycle management SaaS, and Localwell, mobile SaaS for Indian pharma retailers.
Grayscale Ventures was founded by Nikhil Kapur and Siddharth. The duo had been part of STRIVE, a Japanese early-stage venture firm, where the team had led several Pre-Seed rounds in India and Southeast Asia including the likes of Hasura, Classplus, 100ms, Saleswhale, and more.
The ex-STRIVE team has been actively investing in pre-seed rounds in India since 2016, having invested in over 25 startups including Hasura (a unicorn), Classplus (a soonicorn), 100ms, Reshamandi, and Testsigma in their Pre-seed rounds.
On the exit side, the team has taken partial secondary sales and merger and acquisition (M&A) opportunities in some of their portfolio companies such as Hasura, SuperK, and PopXO.
The STRIVE portfolio is sitting at seven times+ multiple on invested capital (MOIC), falling in the top decile of global VC funds with such performance.
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