Non-VC investors rush in to script a new funding story
NEW FACES: A diverse set of investors, ranging from PE cos to family offices, enter the game.
In fact, the share of investment by non-venture capital firms in privately-owned companies has more than doubled to 33% in the past three years, according to data sourced from venture capital firm Sequoia Capital.
The increased interest in India comes at a time when more people have access to the internet, the economy continues to grow amid a global slowdown, and largely remains underserved compared to the US and China, according to investors, founders and analysts. This, in turn, has increased total capital inflow into private firms. Private funding in India rose more than 45% in the first half of the year to $5.4 billion compared to a year earlier, as per data intelligence platform CB Insights.
“India and Southeast Asia are deeply underpenetrated markets on almost every metric. As the markets get deeper and given that companies are continuing to stay private for much longer, a larger fragmented set of investors are evaluating private market investment opportunities,” said Piyush Gupta, managing director (strategic development) at Sequoia Capital on the sidelines of PitStop, an event where the fund’s founders meet overseas investors to pitch business ideas.
In the past six months alone, several top startups have raised capital from this diverse set of investors. These include Meesho, which raised capital from Facebook; Udaan from Hillhouse; Byju’s from Qatar Investment Authority; and Livspace from Ikea.
Private equity funds are also getting more active as they take bets on the new economy.
Westbridge Capital Partners backed Rapido, Vedantu and IndiQube, while ChrysCapital backed Awfis, and Kedaara Capital is in talks to invest in Lenskart, as reported first by ET in its September 2 edition. Others, like General Atlantic and crossover funds like Canada Pension Plan Investment Board, have also stepped up activity.