Zephyr Peacock — the Indian investing wing of New York-headquartered private equity (PE) firm Zephyr Management — plans to make 7-9 investments in the country over the next 18-24 months. The third fund — which has a total corpus of $100 million —will make a total of about 14-15 investments, Pankaj Raina, MD, investments, told FE.
The PE firm, from its third fund — which started disbursing capital from 2020 — has already made investments in six Indian companies, namely: Shiksha Finance, Loanzen, Aqgromalin, Poshn, ZippMat and Ripplr. Raina, who said the PE firm is sector-specific — will bet on the financial services, food and agriculture and infrastructure ancillaries space for its new investments.
“We are largely skewed towards climate finance, by the way of electric vehicles (EVs), we’ll also continue and focus on digitisation of supply chains. Within food and agriculture, we’ll look at farming models which address climate change. High growth and large underserved markets where there’s an absence of dominant players and provides an opportunity for small businesses to become market leaders are a few things that we are attracted to,” Raina explained.
He added that the initial investments in each company will be limited to a maximum of $3 million. The third fund also participates in follow-on rounds of portfolio companies, but caps its investment amount to a total of $10 million in a particular firm.
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“Our investments will be anywhere around $1 million and $3 million and invest more as they continue to grow, there’s no point in sinking more money. The seven to nine investments will mark the end of our third fund,” he added. Once that is done, in the next 12-15 months or so, Zephyr Peacock will set the stage for its next fund, its fourth, of about $120 million.