Key facts
- YourNest Venture Capital has closed a Rs 400 crore continuation fund.
- The fund is anchored by HDFC AMC Select Fund of Funds I.
- It will invest in seven high-performing portfolio companies, including Miko and Dozee.
- The structure provides liquidity to existing investors while allowing YourNest to remain invested.
- Deeptech startups, which often require longer development cycles, are particularly suited for this model.
- Companies in the continuation vehicle have collectively generated nearly 11-fold returns across YourNest's earlier funds.
Deeptech venture capital firm YourNest Venture Capital has successfully closed a Rs 400 crore continuation vehicle, designed to support its most promising portfolio companies. The fund, anchored by HDFC AMC Select Fund of Funds I, will allocate approximately Rs 60-90 crore to a select group of seven startups, including Miko, Dozee, Exponent Energy, Twid, Opkey, and Thriwe. This structure aims to provide liquidity to existing investors while enabling YourNest to continue its investment and support for these companies over the next five to seven years, as they pursue significant growth milestones such as acquisitions or public listings.
Sunil Goyal, managing director of YourNest, explained that these companies have already overcome initial technological, market, and operational hurdles and now require capital for scaling. He noted that continuation vehicles are effective tools for creating liquidity and retaining ownership of high-quality assets, especially given the longer development cycles typical of deeptech startups. Unlike traditional venture capital funds with 12- to 15-year lifecycles, continuation funds offer a more flexible approach for investors seeking to maximize returns.
Founded in 2011, YourNest's investment focus spans artificial intelligence, healthcare technology, enterprise software, mobility, and consumer technology. Goyal emphasized the importance of a healthy secondary market, including continuation vehicles, to complement primary capital in the deeptech ecosystem. He also highlighted that these companies, while scaled, still require the specialized monitoring and guidance from investors familiar with their long-term development, distinguishing them from typical private equity assets.
The continuation fund structure is particularly beneficial for deeptech companies, which often need extended periods to develop proprietary technology, gain customers, and achieve scale. Goyal stated that traditional fund structures can sometimes necessitate premature exits before the full value of these deeptech ventures is realized. Collectively, the companies included in the continuation vehicle have generated nearly 11-fold returns across YourNest's earlier funds. The firm's first fund, established in 2012, has now formally closed with a distributed-to-paid-in capital multiple of 3.3 times. YourNest's portfolio companies hold over 280 patents, a factor that has attracted strategic investors and acquirers. The increasing support for deeptech startups from venture firms, corporate investors, and government initiatives, such as the Rs 1 lakh crore Research Development and Innovation scheme, is driving the launch of more specialized deeptech funds.