How Much More VC Can Indian Startups Absorb? Maybe A Lot!
Sequoia Capital’s new India fund of $920 million – on top of a $720 million fund raised in 2015 — signals the firm’s bullishness on startups in the region even against a backdrop of slowing macro indicators. This fifth fund further positions Sequoia as a leader in the Indian startup investing space and also moves it into Southeast Asia, a focus of the new fund.
Over the past year, Sequoia has accelerated its pace of dealmaking by pouring some $270 million into 54 startups in India, in a bet on a next generation of billion-dollar companies that are buoyed by still-heavy demand for food, transport and mobile services.
The VC firm counts four of India’s most valuable startups in its portfolio: e-commerce marketplace Snapdeal, car hailing app Ola, restaurant search service Zomato, and big data analytics firm Mu Sigma.
In related news, Norwest Venture Partners recently raised a $1.2 billion fund, its third, to back startups and emerging companies in U.S., Israel and India, where the firm has subsidiaries in Bangalore and Mumbai and has been an active investor.
CREO, a consumer tech startup seeking to create its own smartphones and a proprietary software OS, has snagged $3 million from investors Sequoia India, India Quotient and Japanese VC fund Beenext Ventures. Previously known as Mango Man Consumer Electronics, CREO’s product offerings have included media streaming devices under the label of Teewe, reaching 50,000 households across India. In entering the domestic smartphone market, CREO will be competing with the likes of Xiaomi, OnePlus, Samsung, and India’s homegrown Micromax. IDC predicts that India will be the world’s largest smartphone market, after the U.S., by 2017.
On-demand rickshaw aggregator Jugnoo has completed a $5.5 million (an additional $2.5 million on top of last year’s $3 million) Series B round from its existing investors, Snow Leopard Ventures and Alibaba-backed mobile wallet firm Paytm. Launched in November 2014, the young startup is tackling transportation and on-demand delivery at the same time, operating in 22 domestic cities with a reported 2 million users, 6,000 drivers and 30,000 daily rides. Jugnoo plans to use the new funds to reach second-tier cities, increase marketing, improve incentives for drivers, and hire 100 additional employees.
Throughout India, rickshaw drivers are estimated to provide 30 million rides daily. Notably, mobile app Ola also offers rickshaw rides, and Uber previously did as well.
UK-based PE firm Apis Partners has invested in Electronic Payments and Services, a Mumbai-based payment solutions provider for the banking sector. Apis, which focuses on investments in financial services in Africa and Asia, will take a minority stake in EPS as well as a board seat. The deal is timely as EPS considers potential expansion to Africa. EPS previously raised $20 million from Aavishkaar Capital, Asia Participation BV, and Netherlands-based FMO.
Cloud-run data processing provider Qubole has drawn in a $30 million Series C funding round from Institutional Venture Partners, bringing its total funding to $50 million. Existing investors CRV, Lightspeed Venture Partners and Norwest Venture Partners participated in the round, and IVP General Partner Somesh Dash will join the startup’s board.
Qubole was one of 13 companies incubated by Microsoft Accelerator in 2013, and itsfounders Joydeep Sen Sarma and Ashish Thusoo previously built a data service at Facebook. Operating from Silicon Valley and Bangalore, Quobole plans to enhance its Big Data as-a-service analytics platform, enter new verticals such as IoT and retail, and expand sales and marketing in Asia and Europe.