Close on the heels of a recent landmark deal in the Indian e-commerce space, marquee investor Sequoia Capital has raised its fourth India-focused fund of USD 530 million to double-down on its venture and early growth investment activities in India. The new fund will invest primarily in the technology, consumer and healthcare sectors. With this fund raise, the total capital committed to Sequoia Capital’s India-focused funds equals approximately USD 2 billion.
India’s business ecosystem has been through its share of bad times in the last few years, be it in the form of the GDP plunging to 5 percent, the dollar hitting close to Rs.65 or just the overall policy paralysis we witnessed in the political arena.
The tide is changing. This year has seen some landmark strides in the positive direction, specifically in the entrepreneurship ecosystem in India; there has definitely been steady growth and a relentless chase by entrepreneurs to build big businesses, be it in the form of landmark acquisitions, investments or the opening up of an overall opportunity to build a strong mobile-first economy. In the backdrop of this fundamentals-driven stride, Sequoia Capital’s announcement comes as a boost to the entrepreneurship ecosystem.
Sequoia Capital’s India strategy includes seed, venture and growth investments with cheque sizes ranging from a few hundred thousand dollars to over USD 50 million. The scope of the new fund has been extended to include investment opportunities in South East Asia.
Commenting on this development, Shailendra Singh, MD, Sequoia Capital India, said –
The new fund will have a strong focus on early stage technology companies, in addition to our consumer and healthcare strategy. We are specifically spending a lot of time focused on building global technology companies with India as the anchor market and/or the product/technology hub. We have been already helping our companies expand to South-East Asia, Japan and US markets. In this regard, the new fund allows us to make direct investments in south east Asia and we may do more investments like Truecaller where the company is based outside India with India as the anchor market.
He further added, “On the outlook for venture investing in India, we are quite bullish. We believe the future will look different from the past. Especially for venture investing, we need to shed the baggage of the past and prepare our companies for an environment where the worlds second largest mobile/internet user base will be in India. Possibly, many Silicon Valley companies could have their largest user base in India in the time to come. That will change everything in our view.”
Sequoia Capital has been investing in India for the past 8 years and has invested in over 75 companies. These include Capillary Technologies, Druva, Just Dial, Micromax, Mu Sigma, Pine Labs, Prataap Snacks, Quickheal, SCIO Analytics, Star Health, Stovekraft, Truecaller, UnitedLex, Vasan, Vini Cosmetics, Via and Zomato.
In the last few years, Sequoia Capital’s India-focused funds have enhanced their focus on technology investments. More than 25 technology companies have been added to the portfolio since 2011.
Beyond Capital, Sequoia is invested in institutionalizing capabilities that can be actively leveraged by its portfolio companies. An in-house team of 10 executives in legal, finance, marketing, HR, IT, business development and engineering work with founders and management teams of portfolio companies to provide them hands-on support. This is a clear differentiation for the fund in India.
If you are chasing big dreams then this is the time to go for it. Shailendra mentioned,
Our advice to entrepreneurs is to be ambitious and set the bar very, very high. Digital boundaries are blurring so they should plan on competing with the best companies in the world, and not just with Indian companies. We are very focused on hiring A+ engineers and management we can find for our companies in order for them to be globally competitive – that is the biggest challenge and opportunity ahead for Indian startups in our view.
Abhay Pandey, GV Ravishankar, Mohit Bhatnagar, Shailendra Singh and VT Bharadwaj lead Sequoia Capital India Advisors.