Narayana Murthy's VC fund may switch from start-ups to late stage funding

Written by P P Thimmaya | Bangalore | Updated: Mar 7 2014, 14:21pm hrs
Narayan Murthy infosysInfosys chairman NR Narayana Murthy floated Catamaran Ventures, the venture capital and private equity fund, in 2010.
Catamaran Ventures, the venture capital and private equity fund floated by Infosys chairman NR Narayana Murthy in 2010, is most likely to veer away from investing in start-up firms and focus largely on investment opportunities in later stage funding of established companies.

Sources familiar with the matter told FE that Catamaran Ventures is most likely to invest in companies which are established, like the past examples of SKS Microfinance and Manipal Universal Learning. This move, sources said, is largely due to the return of Murthy to Infosys and the entry of his son Rohan Murty, is with the notion that they may be unable to devote their time and attention in investing in start-up companies. In case of later stage funding, it would be easier for Catamaran Ventures to close the deal, sources said.

Catamaran had picked up a 1.3% stake in SKS Microfinance with an investment of R28.1 crore, prior to its IPO in 2010, and has got a certain lock-in period. In Manipal Universal, it had invested R200 crore but later exited in June 2013.

Arjun Narayanswamy, who manages Catamaran Ventures, in an e-mail reply said that the assertion is not true, Catamaran is more active this year than previously (on all fronts). He further said, Being a private family office with no external capital, we try our hardest to maintain privacy.

However, many sources that FE spoke to are of the opinion that the Murthys VC arm has become less active in the circuit. A few venture capitalists on condition of anonymity said that Catamaran has not been very active on the investment front especially with regard to start-ups. In the past, the fund had teamed up with other VCs for investing in various companies.

The $130-million fund has made a few investments which are publicly known like Bigshoebaazar India, Hector Beverages, and Healthspring. These firms are from diverse sectors such as energy drink, healthcare and e-commerce.

Catamaran Ventures has termed itself as a proprietary, sector-agnostic, family office that invests in inspirational early stage and growing companies in India and overseas. Its profile has said that their investments consist of a wide range from the very early to very late stage businesses.

The venture capital funding in India saw lower value of investment in 2013 compared with 2012. Venture Capital firms invested about $805 million over 206 deals in India during the twelve months ended December 2013, according to an analysis by Venture Intelligence, a research service focused on private company financials, transactions and valuations. The VC investment activity was about 18% lower compared with 2012 that had witnessed 252 transactions worth $898 million.

Private equity (PE) investments in India has fallen to its lowest levels since 2009 at $7.5 billion over 384 deals during 2013, compared with the $9.2-billion investment made across 484 deals in 2012, according to Venture Intelligence. The 18 investments of over $100 million in value during 2013, accounted for as much as 47% of the value pie during the year.