Cedar Capital, the venture capital arm of management consulting firm Cedar and fintech market intelligence platform IBS Intelligence, has announced the first close of its Rs 240 crore ($30 million) FinTech Venture Capital fund. The fund aims to invest in almost 15 early-stage startups, primarily focusing on banking technology and business-to-business (B2B) fintech startups.

Sahil Anand, founder and managing partner of Cedar Capital, stated that a lot of disruption has already happened in the business-to-consumer (B2C) space, and many VC funds have already invested there. However, in the B2B space, banking infrastructure and systems still need to be upgraded within banks. Therefore, Cedar Capital’s fund thesis is to back B2B companies in this space.

The fund plans to make initial investments ranging from Rs 4 to 10 crore and will further invest in 8 to 10 successful companies from its portfolio in the future. Limited partners participating in this round include leading family offices and institutional investors from India and the Middle East.

The banking and fintech ecosystem in India is currently facing increased scrutiny and regulatory changes, such as adjustments in risk weights for consumer credit and heightened oversight on credit card operations by the Reserve Bank of India. However, according to Anand, the B2B segment, which focuses on software sales to banks and financial institutions, operates with comparatively lighter regulatory burdens.

Cedar Capital announced the launch of its fintech-focused venture capital fund in March 2023. The fund targets geographies like India, Gulf Cooperation Council (GCC), and other markets. It has appointed Subit Saurav from impact investment firm Aavishkar Capital to co-lead investments, and Sunny Desa from YES Bank to oversee investor relations and fintech investments. The advisory board of Cedar Capital includes industry veterans such as Sanjiv Anand, Pradip Shah, Bobby Parikh, and Felipe Martinez, among others.