adminMUMBAI/CHENNAI: After a brief lull, investors seem to have started looking for deals and cut checks for Indian startups.
Lately, both global and domestic venture capital (VC) and private equity (PE) investors, including the likes of US-based Norwest Venture Partners, have raised new funds. A significant amount of this capital is earmarked for India and there is pressure on investors to deploy it.
LVMH-backed PE fund L Catterton, for example, is launching a new investment vehicle that will finance consumer-focused Indian companies. In fact, about $25 billion of India-focused capital is unallocated, according to industry executives. Also, with China facing a slowdown, India has become more palatable to investors in the broader Asian market.
“China’s slowdown has benefited India and will continue to do so for some time to come,” Vikram Gupta, founder and managing partner of local venture capital fund IvyCap Ventures, which has backed startups such as Purplle and Dhruva Space, told TOI. On Tuesday, the company made the final close of its Fund III, raising Rs 2.1 billion.
About ₹1.25 billion of the ₹2.1 billion fund will be used to make 25 new Series A investments and a portion of the fund’s corpus will also be used for follow-on investments in existing companies. IvyCap Ventures seeks to bet on consumer-focused companies that deploy artificial intelligence, machine learning and other new emerging technologies to create products. “Series A is our sweet spot. In addition to consumer tech, we’re also closing two deals in health tech as we speak. We also see opportunities in fintech, space tech, climate and clean tech spaces,” Gupta said, adding that the offers, including those of the final phase, will be collected in the second half of the year.
PE-VC funding still lagging: Data from market research firm Venture Intelligence showed investments in the January-April period were $8.1 billion, down from $12.3 billion in the year-ago period past However, with sufficient capital, new fund launches by investors and the stability of the ecosystem, the second half is expected to have a significant boost. Last week, Norwest Venture Partners closed a $3 billion fund, a portion of which will be used to make investments in India along with the United States and Israel. The company that has been operational in India since 2005 and has backed unicorns like Swiggy and OfBusiness typically invests between $250 million and $300 million in the country annually. Earlier this year, Facebook co-founder Eduardo Saverin’s B Capital also raised a large $750 million fund to bet on advanced technology companies with a focus on Asia and North America. Indian startups Meesho, PharmEasy and Khatabook are among its portfolio companies.
“The general sense is that we will start to see a sustained year-on-year recovery from the second half of 2024. In the VC segment, proprietary firms such as Blume Ventures, Fireside Ventures and Anicut Capital have been making new bets in recent months,” he said. Arun Natarajan, Founder of Venture Intelligence.
For L Catterton, there has never been a better time to deepen its commitment to India given the country’s huge population and high GDP growth, said Global Co-CEO Michael Chu. The company’s Asian platform has formed a joint partnership with former Hindustan Unilever chief Sanjiv Mehta to drive its India strategy. Gurgaon-based institutional investor Oister Global recently launched a Rs 440 crore fund, a major portion of which will fund technology startups. The company will not invest directly in a startup, but instead will direct its funding through investments in VC and PE funds.
Lately, both global and domestic venture capital (VC) and private equity (PE) investors, including the likes of US-based Norwest Venture Partners, have raised new funds. A significant amount of this capital is earmarked for India and there is pressure on investors to deploy it.
to expand
LVMH-backed PE fund L Catterton, for example, is launching a new investment vehicle that will finance consumer-focused Indian companies. In fact, about $25 billion of India-focused capital is unallocated, according to industry executives. Also, with China facing a slowdown, India has become more palatable to investors in the broader Asian market.
“China’s slowdown has benefited India and will continue to do so for some time to come,” Vikram Gupta, founder and managing partner of local venture capital fund IvyCap Ventures, which has backed startups such as Purplle and Dhruva Space, told TOI. On Tuesday, the company made the final close of its Fund III, raising Rs 2.1 billion.
to expand
About ₹1.25 billion of the ₹2.1 billion fund will be used to make 25 new Series A investments and a portion of the fund’s corpus will also be used for follow-on investments in existing companies. IvyCap Ventures seeks to bet on consumer-focused companies that deploy artificial intelligence, machine learning and other new emerging technologies to create products. “Series A is our sweet spot. In addition to consumer tech, we’re also closing two deals in health tech as we speak. We also see opportunities in fintech, space tech, climate and clean tech spaces,” Gupta said, adding that the offers, including those of the final phase, will be collected in the second half of the year.
PE-VC funding still lagging: Data from market research firm Venture Intelligence showed investments in the January-April period were $8.1 billion, down from $12.3 billion in the year-ago period past However, with sufficient capital, new fund launches by investors and the stability of the ecosystem, the second half is expected to have a significant boost. Last week, Norwest Venture Partners closed a $3 billion fund, a portion of which will be used to make investments in India along with the United States and Israel. The company that has been operational in India since 2005 and has backed unicorns like Swiggy and OfBusiness typically invests between $250 million and $300 million in the country annually. Earlier this year, Facebook co-founder Eduardo Saverin’s B Capital also raised a large $750 million fund to bet on advanced technology companies with a focus on Asia and North America. Indian startups Meesho, PharmEasy and Khatabook are among its portfolio companies.
“The general sense is that we will start to see a sustained year-on-year recovery from the second half of 2024. In the VC segment, proprietary firms such as Blume Ventures, Fireside Ventures and Anicut Capital have been making new bets in recent months,” he said. Arun Natarajan, Founder of Venture Intelligence.
For L Catterton, there has never been a better time to deepen its commitment to India given the country’s huge population and high GDP growth, said Global Co-CEO Michael Chu. The company’s Asian platform has formed a joint partnership with former Hindustan Unilever chief Sanjiv Mehta to drive its India strategy. Gurgaon-based institutional investor Oister Global recently launched a Rs 440 crore fund, a major portion of which will fund technology startups. The company will not invest directly in a startup, but instead will direct its funding through investments in VC and PE funds.
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