Mumbai: In June, California-head- quartered venture capital (VC) firm ePlanet Ventures will complete raising its first solo fund with a targeted corpus of $500 million (Rs2,015 crore).
The firm, which bet on successes such as Baidu.com Inc. and Skype Inc. as an affiliate fund with VC firm Draper Fisher Jurvetson (DFJ), plans to make at least 15 of its investments in India, which constitutes about a third of its total number of deals.
“We are actively looking at investing more and would like to be among the Top 5 (VC) players in India,” said Asad Jamal, founder, chairman and chief executive, ePlanet Ventures, in a telephone interview.
Growth-oriented: EPlanet Ventures MD Chandrasekar Kandasamy.
EPlanet Fund II (the previous fund was raised under the DFJ-ePlanet brand) will focus on India and China for a majority of its investments. The firm, which began fund-raising in late 2006, has invested in seven companies on its own so far, including $11 million in Chennai-based medical equipment company Trivitron Diagnostics Pvt. Ltd, along with JSBC Private Equity Asia Ltd. So far, it has typically invested $2-10 million per deal. Post-June, it is likely to do larger, growth deals here.
“At least half our investments will be in growth stage, and we will do some late-stage deals also,” says Chandrasekar Kandasamy, its managing director.
EPlanet was set up as a $650 million global fund in affiliation with DFJ in 1999. At a time when most others largely focused on the US market, it invested in markets such as China and India. However, the two parted ways in 2005.
“DFJ, which used to be US only, wanted to go global too and we felt it would be conflicting,” says Jamal. The partnership has yielded some spectacular returns, including Skype, which was acquired by eBay Inc. for $4.1 billion, Chinese search engine Baidu.com Inc., which went public in 2005, and nine other companies. The fund has delivered a 32% IRR (internal rate of return, a measure of VC fund performance), according to Jamal.
India is perhaps the only key market where the two will go head-on.
DFJ, which operates through affiliates in most markets, has chosen to invest directly in India. Among the top VC’s globally, DFJ set up its India operations only six months back. EPlanet, which has had successes in China as an affiliate, is yet to see the same in India. Under the DFJ-ePlanet fund, it has invested in companies such as online DVD rental company Seventymm Services Pvt. Ltd and retail analytics firm Manthan Software Services Pvt. Ltd.
In India, ePlanet will focus on sectors such as retail, education, health care and consumer-driven businesses. While its formal partnership with DFJ is over, they could continue to team up on specific deals.
Last month, ePlanet co-invested with DFJ in Naseeb Networks Inc., an online recruitment and social networking site for the Pakistan market.