India-Based Private Equity Firms Focusing on Venture Capital - March 2013

by Yong Xiang Pua

  • 22 Mar 2013
  • PE

There are 88 India-based private equity fund managers which consider venture capital either as their sole investment focus or part of a broader investment mandate. These fund managers have collectively raised $11bn in aggregate capital over the last decade, which represents 11% of the capital garnered by Asia-based GPs. In terms of dry powder, venture capital fund managers in India have yet to deploy approximately 35% of the capital raised over the last 10 years. In comparison, China-based private equity fund managers that have an allocation to the venture capital strategy raised $45bn in aggregate capital over the same period, of which 52% ($23.4bn) of the capital remains uncalled by these GPs.

Sixty percent of the 88 India-based private equity fund managers have a sole focus on venture capital-related investments. Eighteen fund managers consider themselves as early stage specialists, targeting only seed and start-up stage investments. Thirty-three GPs invest across all stages of the venture capital development life cycle, including expansion/late stage. Other India-based private equity fund managers which do not focus solely on venture capital deals include private equity strategies such as growth, buyout, and mezzanine.

More than two-thirds (67%) of India-based private equity managers that have an interest in venture capital opportunities focus on the domestic market. Twenty percent of India-based private equity fund managers that consider venture capital as part of their investment strategy expand their investment geographic scope to include Asia. The remaining 11 India-based fund managers will seek venture capital-related opportunities around the globe, including in North America and Europe.

Nexus Venture Partners is one of the significant India-based private equity firms that focus solely on venture capital-related opportunities. Nexus Venture Partners targets only early stage companies across a wide range of sectors, including technology, internet, healthcare, and consumer services. It manages $590mn in aggregate capital commitments via the India-focused Nexus India Capital fund series. Its latest vehicle in the series, Nexus India Capital III, raised $270mn in its March 2012 final close, exceeding the original $250mn target.

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