Photo: Mint
Photo: Mint

Patni scions set to raise $100 mn venture capital fund

New fund will make early-stage and early growth-stage investments in companies focused on the mobile, Internet, electronic payments markets

Mumbai: Amit and Arihant Patni, sons of Gajendra Patni, co-founder of Patni Computer Systems Ltd, are readying to raise their second venture capital fund worth $100 million under Nirvana Venture Advisors, the venture capital firm they launched in 2011.

Nirvana has deployed about 80% of its $40-million first fund in eight start-ups. The fund plans to close another four-five deals by 2015.

The new fund will make early stage and early growth stage investments in companies focused on the mobile, Internet and electronic payments markets.

Nirvana has made investments in real estate website Housing.com, payment solutions provider TranServ Pvt. Ltd, online gaming company games2win, e-commerce platform KartRocket, hyperlocal marketplace Zopper, online local services marketplace UrbanPro, talent measurement solutions provider Jombay and healthcare IT services provider Healthsprint.

“Start-ups in IT-enabled services are in demand, and we want to focus our investments in the area by backing more companies," said Amit Patni, co-founder and chairman of Nirvana Venture Advisors.

Nirvana is in initial discussions with existing investors from Japan and Germany and new investors in the US to raise between $75 million and $100 million for the new fund, he added.

The first close will be at $30 million by March 2016 and the fund will invest in 15-20 companies with a ticket size of $3-5 million, he said.

Amit and Arihant Patni entered the venture capital space in 2011 after Patni Computers was acquired by an iGate Corp.-Apax Partners Llp consortium. Brothers Gajendra, Narendra and Ashok Patni sold their stake of 45.6% in Patni Computers, along with 17% held by PE firm General Atlantic Partners, to the consortium, in a deal worth $1.22 billion ( 5,500 crore) in 2011.

Amit and Arihant Patni put in $15 million as anchor investors in their first fund and plan to invest in the second fund too, Amit Patni said.

Nirvana and other businesses of the Patni family come under RAAY Global Investments Pvt. Ltd, the family office of the Amit Patni Group, established in 2002.

Other business run under RAAY Global include Waterfield Advisors Pvt. Ltd, the Mumbai-based boutique advisory firm which was sold in 2014, hedge fund Elysium Investment Advisors and seed fund for Big Data companies, The Hive India.

Amit Patni said Elysium is in talks with various investors to raise about $300 million over the next 5 years to invest in Indian stock markets. In Elysium, too, the Patni family has invested about $7 million.

India is on the radar of foreign limited partners (which invest in venture capital and private equity funds) and venture capital funds focused on IT and e-commerce are finding it easy to raise money from overseas investors, said Padmaja Ruparel, an angel investor and president of the Indian Angel Network.

According to data from VCCedge, a database that tracks VC investments, 2014 saw a 300% growth in fund-raising by venture capital firms. Against $264 million raised by 16 venture capital funds in 2013, 2014 saw 14 funds raising 1.1 billion.

In 2015, three new venture capital funds have raised together about $350 million till date. Accel India IV Lp, managed by Accel India Management Co. Pvt. Ltd, alone raised $305 million in 2015.

Leading venture capital funds which raised funds last year include Sequoia Capital India IV Ltd ($495 million), Mayfield India II Ltd ($108 million), Lightbox Ventures II ($100 million) and Orios Venture Partners Fund ($50 million).

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