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Revenue-based growth capital firm N+1 Capital on Tuesday announced that it has made its first close and has also kicked off the maiden investments in startups such as ShypLite, Clensta Technologies, and Teamonk Global Foods.

The fund is sector and stage agnostic, and invests in revenue-generating companies with ticket sizes up to $2 million (Rs 15 crore).

Rahul Chowdhury, Managing Partner, N+1 Capital said,

“We are thankful and delighted to have global family offices and HNIs come on board with us and support us as first time fund managers. They have made our vision, of supporting over 100+ entrepreneurs grow and scale their businesses profitably, a reality and enabled us to bring this growing global asset class to India for the first time. As we move forward towards the second and final close we will be working to bring on board more institutional investors.”

“We picked N+1 for two reasons, the people and our desire to diversify. This is a team built from invaluable experience, great leadership, and a unified vision. A team we knew we could trust. They are hyper-focused to build out this asset class in India,” added one of the US-based family office investors. 

Earlier this year, the fund had received approval from the Securities and Exchange Board of India (SEBI) to launch as a Cat-II AIF, with a target corpus of $100 million ($75 million + $25 million greenshoe), with LetsVenture as its Venture Partner. 

With respect to the first set of investments, N+1 Capital Managing Partner Ashish Singla added,

“We are pleased to announce our first set of investments in Shyplite (a logistics automation and fulfilment platform enabling businesses to increase shipping efficiency by providing a single-window platform integrated with multiple carriers), Clensta Technologies (an FMCG company that creates innovative waterless healthcare solutions to make hygiene accessible for anyone, anytime and anywhere), and Teamonk Global Foods (a global speciality tea business). We will make four to eight investments per quarter, and we already have a robust pipeline for Q2 FY2022.”

Founded by Rahul Chowdhury and Ashish Singla, both graduates of the Kellogg School of Management, N+1 Capital has launched a non-equity based asset class in which the fund gets a percentage share of the investee company’s ongoing revenues each month. If an investee company has higher revenue in a particular month, the fund gets a larger share and vice versa. Therefore the interests of the Fund and investee company are aligned to one another.

Commenting on the first close, a Singapore-based family office investor, (lead investor for N+1 Capital), said,

“As entrepreneurs in India mature and the ecosystem matures our Family office has looked for newer asset classes that provide us with security of returns and a differentiated cost structure. We are delighted to partner with N+1 Capital and believe that they will make a massive impact on entrepreneurship in India via revenue based debt finance.”

The fund’s advisory board includes Ranjit Pandit (former India MD of McKinsey and Co), Dr Madhu Mohan (ex-Chairman Invascent, healthcare PE fund), and entrepreneur and turnaround specialist Jason Kothari.