India’s venture capital market was subdued in 2017 at the early stage deal making while investors continued to struggle to generate returns from the portfolio. There were 351 deals worth $1.3 billion in 2017 which is 27% lower in terms of volume as compared to 2016. Investors are under pressure to generate returns on their investment which will impact the pace of deal making in 2018.
Here is a look at some early stage deal makers to watch out for in 2018.
IAN Fund – Indian Angel Network, the angel network debuted in 2017 with a $55 million IAN fund. The fund committed $27 million in April 2017 and is looking to tie up the rest. IAN was started in 2006 and has significantly grown since then; it has a portfolio of more than 120 investee companies and 450 members that invest their capital through the network. Given the increasing base of High Net worth Individuals in their network, the capital will only be increasing. The fund also participates into larger deals at the Series A stage and could play an important role in plugging the gap of the shortage of capital in Series A to a certain extent.
Fireside Ventures – Founded last year, the Bengaluru based Fireside Ventures is the only venture capital firm in the country which invests exclusively into bricks and mortar startups which address local consumer markets. It is founded by Kanwaljit Singh, former Helion Venture Partners managing partner. He is in the final stage of raising a $45 million fund which is targeting investments in sectors like food and beverages, home products and personal care products. The fund has invested in MamaEarth, a baby care products maker and Bombay Shaving Co., a male grooming product maker.
SAIF Partners – The Delhi based firm invests in early and later stage companies. It has raised $350 million fund last year and plans to deploy the same across different sectors which include education, consumer brands, and healthcare and consumer internet. It has plans to invest 15-20% of the fund into listed companies; its major focus will remain early stage and later stage startups. The firm harvested $400 million from a partial sale in One97 Communications Pvt Ltd and sold the remaining stake to MakeMyTrip Ltd. Overall, it has reported to have made $400 million from an original investment of $25 million.
Sequoia Capital India – Sequoia Capital India has always been a deal maker to watch out for. It is in the middle of deploying a $920 million fund which it raised two years back. The firm closed 21 deals in 2017 and 25 in 2016. Its bets on non-technology and brick and mortar businesses indeed stand out. This year, the firm plans to continue with the investment into non technology bets.
Aavishkaar Intellecap Group – The group, which consists of a number of businesses from venture capital funds to venture debt and investing banking, consolidated all the businesses under one holding company which now operates as a single entry point for institutional investors who are interested in making an investment into the group’s business. The group raised $25 million in equity funding and is currently on the road to raise $200 million, the largest ever raised for the market. With commitments worth $95 million from institutional investors, the group will be focusing on early stage startups in the coming quarters.
SoftBank –SoftBank is a big deal maker to watch out for. It typically invests in later stage companies and has remained away from early stage market. It put $4 billion in India in 2017 and the investment run is expected to continue this year as well.
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