Avendus Capital plans to launch a $250 million fund targeting mid- to late-stage growth opportunities in consumer and digital start-ups under the Zodius platform
Mumbai: Avendus Capital Pvt. Ltd, a financial services provider backed by private equity firm (PE) KKR & Co. LP, has acquired technology-focused PE company Zodius Capital Advisors, an early investor in start-ups like online furniture retailer Pepperfry and grocery site BigBasket, according to senior management at Avendus and Zodius.
Financial details of the deal weren’t disclosed.
Zodius was founded by Neeraj Bhargava, former chief executive officer of business process outsourcing firm WNS Global Services Ltd, along with Gautam Patel and Shilpa Kulkarni.
At present, there are three funds under the Zodius platform—a first independent fund of $20 million and two funds launched along with Avendus worth $110 million and $30 million, respectively.
In 2014, Zodius partnered with Avendus to raise $500 million to invest in firms in the high growth digital and SMAC (social, mobile, analytics and cloud)-based business services. .
Avendus, which has purchased the Zodius platform and the brand, will continue to launch future funds under the Zodius brand name and the existing Zodius team will continue to manage the funds until they exit the investments. Shilpa Kulkarni, managing director at Zodius Capital, will lead the new fund raising efforts while Neeraj Bhargava will be the chairperson of the investment committee.
“The digital opportunity continues to grow on the back of positive moves by the government like demonetization and GST (goods and services tax). Avendus expects 20% of the Indian GDP to come from digital opportunities over the next 10 years," said Ranu Vohra, co-founder, managing director and chief executive officer at Avendus Capital, citing the rationale behind buying a technology-focused venture firm.
“We expect significant value creation opportunities for investors in this sector and the new funds will address capital and strategic growth needs of companies in the consumer and digital sectors," Vohra added.
Besides the three funds, Avendus plans to launch a $250 million fund targeting mid- to late-stage growth opportunities in consumer and digital sectors under the Zodius platform. The fund raising will begin by early next year.
“Avendus already being a partner in the previous funds with a strong franchise in the tech/digital and consumer space is a natural home for the Zodius brand and to build the Zodius platform further into a leader in the very attractive market for growth capital funds in the Indian tech sector," said Bhargava, senior managing director and CEO at Zodius Capital.
After KKR’s acquisition of Avendus in 2015, the Mumbai-based financial services firm has been on an expansion mode with building up new business verticals and bringing senior industry veterans in the group.
In September 2016, Avendus Capital hired the entire top management of Ambit Investment Advisory Co. Ltd, including chief executive Andrew Holland, managing director Vaibhav Sanghavi and marketing head Bhautik Ambani to set up a hedge fund business.
Last year, Avendus expanded the business of Avendus Finance Pvt. Ltd, a non-banking financial company (NBFC), by hiring Sandeep Thapliyal, the former head of commercial and investment banking at RBL Bank Ltd. It launched a structured credit fund worth Rs500 crore.
Bhargava, who was previously the managing partner of eVentures India, was also the first investor in MakeMyTrip Inc. (listed on the NASDAQ), NetMagic (sold to NTT), Customerasset and Mentorix (sold to LionBridge). Bhargava, who co-founded WNS Global Services in 2002, led the BPO company for a US listing.
Prior to its JV with Avendus, Zodius had independently raised the first fund worth $20 million, from which it had invested in Singapore-based big data firm Antuit; digital marketing firm BORN (earlier known as Group FMG), artist and event management venture Only Much Louder, which was sold later to Chernin Group; and financial research firm ZyFin. Zodius’s investment from new fund include AppsDaily Solutions, online grocery start-up BigBasket, and Pune-based industry research and consulting company MarketsandMarkets Research Pvt. Ltd.
In September 2016, Avendus Capital hired the entire top management of Ambit Investment Advisory, including chief executive Andrew Holland, managing director Vaibhav Sanghavi and marketing head Bhautik Ambani as part of setting up the hedge fund business.
Last year, Avendus expanded the business of Avendus Finance Pvt. Ltd, the non-banking financial company (NBFC) by hiring Sandeep Thapliyal, the former head of commercial and investment banking at RBL Bank Ltd. It had launched a structured credit fund worth Rs500 crore.
In August, Avendus Capital had acquired Ocean Dial Asset Management, a UK-based asset management company that currently manages £450 million in Long Only India equities, across three funds. Avendus’s acquisition of 100% shareholding from Raju Shukla, chairman and managing director, Ocean Dial Investment Company and the Management Team was part of Avendus’ plan to expand its asset management business.
US-based KKR & Co bought a majority stake in Avendus Capital for about $115 million in November 2015. As part of the deal, KKR committed to invest another $60 million in the NBFC, which has been started with a capital base of Rs400 crore. The firm expects to take it to Rs3,000 crore over the next 18-24 months.
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