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Lightspeed to raise new fund, earmarks up to 25% for India

Lightspeed to raise new fund, earmarks up to 25% for India
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First Published: Thu, Dec 20 2007. 12 10 AM IST

Seeking opportunities: Lightspeed Advisory managing director Srini Vudayagiri says the firm plans to invest in non-tech sectors in India.
Seeking opportunities: Lightspeed Advisory managing director Srini Vudayagiri says the firm plans to invest in non-tech sectors in India.
Updated: Thu, Dec 20 2007. 12 10 AM IST
Bangalore: Lightspeed Advisory Services India Pvt. Ltd said its US-based parent company Lightspeed Venture Partners would soon float a new fund, out of which 20-25% will be invested in India with the rest going to investments in China, Israel and the US.
Seeking opportunities: Lightspeed Advisory managing director Srini Vudayagiri says the firm plans to invest in non-tech sectors in India.
Srini Vudayagiri, managing director of Lightspeed Advisory, declined to provide details of the size of the fund but said the company now plans to start investing in companies outside the technology business in India. He said “40–50% of our investments in India will now be diverted to the non-tech sectors. This has been prompted by local market needs. We will mainly investin consumer-driven sectors and allied infrastructure-led companies.”
Lightspeed Advisory has been investing in India out of a $480 million fund its parent closed in 2005. Lightspeed Advisory has invested more than $50 million in five Indian companies, on its own and in association with other investors, in the last 18 months.
According to Vudayagiri, Lightspeed is aggressively looking at non-tech investment in India because of strong economic growth, rising consumer demand and growing spending power. He said the firm would explore investment opportunities in the fields of marketing and media, education, health care and life sciences, and financial services. Lightspeed will, however, not invest in core infrastructure projects such as the development of roads, airports or bridges. “We are interested in companies associated with metal handling, logistics and component supplies,” added Vudayagiri.
Lightspeed’s India investments have been in Four Interactive Pvt. Ltd (better known for its local information service provider Ask Laila), TutorVista, Mercantila, Virsa Software and Nexus Capital. Vudayagiri said the company has thus far only looked at investments between $5 million and $15 million, but that it would consider investing up to $40 million in one company.
Lightspeed’s first non-tech investment is expected in the next three months; Vudayagiri did not provide any more details of this investment. In technology, Vudayagiri added that the company would continue looking at opportunities in Internet-based services, mobile services and digital media.
Technology-focused venture capital firms have been typically investing in the range of $2 million to $8 million,said venture capital information provider Venture Intelligence’s chief executive Arun Natarajan.
In recent months, other investment firms such as Cannan Partners, Bessemer Venture Partners, Matrix Partners and Mayfield Fund have also diversified into investments outside the technology sector.
Lightspeed Venture Partners manages $1.3 billion of funds. Over the past two decades, the firm and its partners have invested in more than 120 companies.
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First Published: Thu, Dec 20 2007. 12 10 AM IST