Marquee investment fund WestBridge Capital, which has backed unicorns such as LEAD and Vedantu in recent years, has raised $1.5 Billion to invest in Indian companies, at least four people familiar with the development told Moneycontrol.
The new pool of capital will be used to invest in segments such as consumer technology, SaaS (software as a service) and fintech, among others, signifying optimism in the region even as investors turn cautious in the current market. The funds raised will be a part of its crossover fund.
WestBridge, which started out with a public markets focus over a decade ago, follows an ‘evergreen fund structure’ - a fund that typically invests for a longer duration or for as many as 20 years. It raised the fresh corpus over the last two months, sources added.
The newest fund will be WestBridge Capital’s largest-ever fund for India-focused companies. The fundraise comes at a time when the PE firm’s assets under management (AUM) in India have crossed $10 billion, sources said, requesting anonymity. When contacted, WestBridge Capital's co-founder and MD Sandeep Singhal declined to comment.
WestBridge Capital, originally founded in 2000, had merged with Sequoia Capital in 2006 to form a joint venture - Sequoia Capital India. WestBridge had raised two funds before the merger. After the merger with Sequoia Capital, the private equity firm raised three funds and had assets under management of as much as $1.8 billion till 2011.
In 2011, the company’s founding managing directors - Sumir Chadha, KP Balaraj, Sandeep Singhal and SK Jain - left Sequoia Capital India to revive Westbridge Capital. Since then, the company has invested in a number of Indian listed companies, stepping up its startup play in the last few years. Westbridge Capital’s total portfolio includes as many as 132 companies to date, out of which 104 startups are India-based companies.
Westbridge has backed as many as eight unicorns to date and counts 19 soonicorns or startups valued between $500 million and $900 million on its portfolio.
The company has also invested in listed companies like Axis Bank, Dr Lal Path Labs, Havells, Mindtree, and Indigo Airlines among others, according to data by Tracxn Technologies. In 2022 alone, Westbridge has participated in unicorn rounds of as many as three startups - PhysicsWallah, Leadersquared and LEAD.
Westbridge Capital joins a growing list of PE and venture capital (VC) firms to raise large funds for India-focused companies. In June, Sequoia Capital India had raised its largest-ever fund of $2.85 billion for Indian and Southeast Asian startups. Matrix Partners India, another early-and-mid-stage VC firm, had written to the Securities and Exchange Commission (SEC) disclosing that it is looking to raise its largest-ever $450 million fund for India-focused startups.
Earlier this year, two aggressive early-stage VC investors--Accel and Elevation Capital - had raised their largest-ever India-focused funds of $670 million and $650 million respectively. The aggressive fundraising by PE and VC firms for Indian startups underlines their bullish sentiment, at a time when the overall funding to the startup ecosystem has slowed amid a correction in the global financial markets.
Moreover, most of these PE./VC firms invest aggressively at early stages suggesting that the competition for early-stage investments will get intense. Early-stage investments have already risen in the first half of 2022 over 2021. To be sure, 2021 was a blockbuster year of fundraising for Indian startups. Moreover, late-stage investors like Tiger Global, have upped their early-stage bets in India this year.In a recent interview with Moneycontrol, Venky Harinarayan, founding partner at Rocketship VC, another early-stage VC investment firm, had said that he expects valuations at early stages to inflate in the next three to six months, with investors heavily betting on early-stage companies.