In what shows rising confidence in the Indian startup ecosystem, SAIF Partners, a venture capital and growth equity investment firm, raised $350 million for a new India-focused fund in just three months.
Mukul Singhal, principal at SAIF Partners, told FE in an interview that the recently closed SAIF Partners India V fund will invest in a mix of early and mature-stage companies, especially those creating technology-based solutions and content for smartphone users.
SAIf Partners hopes to deploy $70-100 million out of its India V fund in 2015 alone, Singhal said.
SAIF Partners, which has invested in ventures like Paytm and BookMyShow, has already committed around $30 million from the India V fund since January, after closing the fund in December.
“Given the deal flow I am seeing, we should be able to close five to eight growth stage deals this year with a size between $5 million to $10 million”, Singhal says. SAIF Partners will also look to do 10-12 seed investment deals during the year, which are typically smaller in ticket-size compared to growth stage deals.
SAIF Partners looks to invest in growth stage companies operating in sectors like financial services, auto, travel and mobile commerce.
Some of the specific areas of investment that SAIF Partners is looking at for its India V fund include financial services, local area services and entertainment content providers.
In financial services, SAIF Partners wants to invest in companies that are into lending, management of personal finance, and distribution of financial products. The PE firm will also focus on e-commerce, particularly shopping, fashion, and home solutions that are smartphone-based.
Singhal says that the local services market (service providers that cater to particular neighbourhoods) is a huge opportunity, especially since the market unorganized and inefficient at present.
“We are keenly evaluating opportunities in the area of local services. We will invest in businesses that tap into demand for services such as home solutions (like intenor decoration), wedding solutions, and beauticians at home,” he said.
The new fund will also invest in entertainment-based content providers. Singhal says that SAIF Partners has delilvered returns four to five times the size of their original investments to their limited partners since 2001 and is not considering any exits in 2015.
“We have completely exited Fund II, partly exited Fund III, and Fund IV exits will take some more time”, Singhal said. “We are sitting on a fair
amount of liquidity from the JustDial IPO.”