Mumbai: The Fidelity International-backed Eight Roads Ventures, which has invested in startups such as Icertis, Fibe and Shadowfax expects to accelerate its funding in India this year, top executives at the firm said.
“We see this year as a good time to be accelerating our investments in the country. I'm anticipating five to six deals we’d like to back in India, and we're seeing the deal flow in the market. So, we are keen to deploy more,” Alex Emery, president at the firm, told Mint in an interview. He said businesses in the country will continue to grow rapidly in line with the Indian economy.
Emery emphasized that India is the single biggest opportunity within Asia for the firm. “Historically, China has been pretty big. But we're seeing India really overtake China in terms of opportunity set, at least for the kinds of investments that we're doing and backing,” he said.
His comments come nearly two decades after the investment firm began investing in India in 2007. Over the years, Eight Roads has committed about $1.6 billion in the country and has backed 80 businesses. Of these investments made, 38 have been exited either fully or partially while 11 have turned into businesses that are over $500 million in value with some of them valued over a billion dollars. The company has seen about five of its portfolio companies pursue public market listing, two of which listed on Nasdaq.
Eight Roads, which invests across tech and healthcare, typically invests in early growth and growth stage businesses. Within technology, it has backed companies in subsegments such as fintech, enterprise, consumer, and now increasingly artificial intelligence-driven themes, including agentic solutions.
In healthcare, the investment firm does a combination of lifesciences, digital health and medtech and healthcare services. The cheque sizes are between $5 million and $10 million on the lower range and $25 million and $30 million or even $40 million in some situations.
“In the last couple of years, healthcare has become the largest sector for private investments in the country from the fourth or fifth largest a couple of years ago," said Prem Pavoor, managing partner and head of India Ventures at the firm. "With evolving themes over the years, we're seeing pharma and MedTech move up the innovation curve with more novel and innovative companies coming up. Even on aspects like healthcare services, we are seeing a lot of interesting formats.”
Beyond India, the firm invests in China, Israel and Japan and has invested about $3-4 billion in Asia over the last couple of years. Other Indian firms backed by Eight Roads include Caplin Steriles, Enzene Biosciences, Doceree, Quizizz, Wint Wealth, and SaaS Labs.
“When you think about the opportunity set in Asia, we think it's very valuable to be in the three leading markets, but there's no doubt that India's the most exciting opportunity for the foreseeable future,” Emery said, adding that various factors, including a robust digital infrastructure and payments network have laid a foundation for investments in the country.
While the firm is bullish on India, it continues to operate with a diversified mindset as it deploys capital through its pan-Asian fund to invest in the country. “The benefit of having a pan-Asian pool is to get more collaboration across the team. Over a period of time, whether it's India, China, Japan or other parts of Asia or in the world, we have seen that the environment is very cyclical," Emery said.
As far as exits are concerned, the Fidelity-backed investment firm sold part stakes in software-as-a-service (Saas) platforms MoEngage and Whatfix and logistics firm Shadowfax to TR Capital in a $50-million secondary transaction in June last year. While the firm did not disclose the total value of capital returned to date, Pavoor indicated that Eight Roads will have returned more capital than invested to date in India.
Emery said exits are a key focus area for investors today. “We have to take these opportunities when they arise because sometimes you won't get the full exit for a long period of time. The whole notion of secondary transactions was a relatively small part of the market. It's growing, and the CVs (or the continuation vehicle) type of transactions, are definitely increasing,” Emery said.
“We believe this is here to stay. This is not a temporary thing because there was low liquidity. I think this is one of the tools that GPs (general partners) need to provide opportunities to return capital to LPs (limited partners), and to de-risk deals over time," he said. "We think this will remain a part of how venture capital firms operate going forward, including in India. So, this will continue to grow as a percentage."