Mumbai: Sequoia Capital India has raised a $300 million (Rs1,233 crore) venture capital fund, dubbed Sequoia Capital India III, for investments in Indian start-ups, marking a formal comeback by the Bangalore-based investor in the early-stage investing space after a brief hiatus. The new fund also makes Sequoia the first Silicon Valley venture capital firm to have an exposure of more than $1 billion in this market. The firm is slated to officially announce the fund on Friday.
This is Sequoia’s fourth fund for the Indian market. The first two funds, launched in 2000 and 2005, had a combined corpus of $340 million and are almost fully invested. Last year it launched a $400 million later-stage fund, of which $150
million has been invested so far.
The strategist: Suquoia Capital’s managing director Sumir Chadha
“Our investment strategy is to be present across multiple deal stages, and this ($300 million) fund allows us to do that,” said Sumir Chadha, managing director, Sequoia Capital India. Chadha co-founded the firm with managing director K.P. Balaraj in 2000, known at the time as WestBridge Capital Partners. Menlo Park-based Sequoia Capital merged WestBridge with itself last year as part of its entry strategy for India. The firm’s IRR (internal rates of return) from its first two funds are said to be in the region of 35-40%, though this could not be independently confirmed.
While the firm moved into later-stage investments with its third fund last year, early-stage investing has been its forte since inception. Some of the notable start-ups it has been associated with include July Systems Inc., Applabs Pvt. Ltd, Mauj Telecom and Guruji.com.
The firm has invested in 35 companies so far including early and later-stage deals. In terms of sectors, offshore services and Internet and wireless sectors have been its sweet spot, followed by consumer businesses focused on the domestic market. It will also look at early-stage financial services investment opportunities from the new fund.
In a bid to manage its dual investment strategy better, the firm has recently set up a three-member team in Mumbai to focus only on later-stage investments, said Chadha. Senior partners such as Chadha and Balaraj, however, will continue to look at deals at both ends of the dealflow, he said.
The new early-stage fund is slated to be followed by a second later-stage fund, which, sources close to the firm said, will be raised by the second half of 2008. Chadha declined comment on the proposed fund, which is expected to be at least twice the size of its existing later-stage fund.