What's happening
GCC-based private equity firm Razor Capital is raising a $75 million second offshore fund to buy secondary stakes in growth-stage Indian tech and digital startups, co-founder and managing partner Abhinav Munshi told Fortune India on October 20, 2026.
The strategy targets the liquidity gap in startup funding in India: the fund will buy existing shares from early investors, angels and employees in Series B to D companies, rather than infusing fresh primary capital. Razor is also planning an Indian AIF to tap domestic capital for the same strategy.
Why secondaries
Razor's first fund was $35 million, deployed across three companies, and included a partial exit from quick-commerce major Zepto. Munshi said secondary investments let the firm act as a "liquidity partner" for early-stage investors while giving founders something equally valuable — cap-table clean-ups that replace 30–40 early angels with a single institutional partner ahead of an eventual IPO.
The timing fits a broader trend: as more Indian startups stay private longer, secondary transactions have become a key pressure valve for early backers and ESOP-holding employees waiting for public-market liquidity.
Why it matters for founders
Secondaries are becoming a structural part of the Indian funding stack, not a side trade. For founders, a clean secondary — one institutional buyer replacing dozens of small angels — can simplify governance and make the IPO cap table far more attractive to public-market investors.