Planify's VentureX Fund Secures INR 100 Cr, Eyes Expansion to INR 500 Cr Launched on January 1, 2025, VentureX Fund aims to unlock opportunities within the SME sector by investing in high-growth MSMEs.
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Financial institution Planify announced that its SME-focused Alternative Investment Fund (AIF), VentureX Fund, has secured INR 100 crore in commitments within months of its launch. This milestone underscores the increasing investor confidence in SME investments, recognizing their high growth potential and attractive returns.
Launched on January 1, 2025, VentureX Fund aims to unlock opportunities within the SME sector by investing in high-growth MSMEs. The fund focuses on businesses with strong fundamentals, scalable models, and long-term value creation potential. Unlike traditional investment avenues, VentureX targets SMEs that are nearing listing or are already listed on platforms like the Nifty SME Emerge or BSE Small Index, allowing early-stage investments in high-growth companies.
Discussing the fund's next steps, Rajesh Singla, CEO and second fund manager of VentureX Fund, stated, "We plan to expand our fund size by an additional INR 250 crore, complemented by a green shoe option of INR 250 crore." This expansion aims to enhance access to promising SMEs, ensuring diversified and robust investment opportunities.
SMEs play a crucial role in India's economy, contributing 30% to the GDP and employing over 110 million people. Alternative Investment Funds (AIFs) like VentureX help drive SME growth by providing capital for capability expansion, technology adoption, and operational scalability. The SME sector has also demonstrated strong public market performance, with 239 SME IPOs in 2024 delivering returns of nearly 135%, reflecting robust investor confidence.
Despite their significance, SMEs often make headlines for financial mismanagement or compliance issues involving a few players. However, Singla emphasized that many SMEs with strong business models are creating immense value. "There is significant growth in the SME space. Despite their contributions, many SMEs struggle to access capital and resources for expansion. VentureX bridges this gap by offering tailored financial support, enabling enterprises to scale, adopt advanced technologies, and enhance competitiveness," he said.
Maneesh Nath, the first fund manager at VentureX, also highlighted the sector's exceptional performance. "SMEs have consistently delivered outstanding returns, with a 61% CAGR, surpassing the 28% CAGR of Nifty Small Cap and the 20% CAGR of Nifty 50 over the last five years," he noted.
With its strategic focus on high-growth SMEs, VentureX Fund is poised to be a game-changer, providing much-needed capital and fueling the next wave of entrepreneurial success in India.
