Common Catalyst, a Silicon Valley enterprise capital group, is increasing its presence in India by becoming a member of forces with an area enterprise agency and earmarking greater than $500 million for investments on the planet’s most populous nation.
The U.S. enterprise capital group is merging with Enterprise Freeway, an India-based agency whose investments embrace social commerce startup Meesho and B2B industrial market Moglix. TechCrunch reported in regards to the two enterprise companies’ talks for a deal in January.
The deal will see the mixed entity plot a brand new multi-stage funding technique for Common Catalyst in India, spanning early to growth-stage checks throughout industries, Enterprise Freeway founder Neeraj Arora and its GP Priya Mohan advised TechCrunch in a joint interview.
Enterprise Freeway, which raised $78.6 million for its second fund in 2020, has historically targeted on early-stage investments. As a part of the Common Catalyst staff, it would additionally increase its remit to incorporate incubating startups, a comparatively uncharted territory within the nation. “Our imaginative and prescient is to be a part of constructing quite a few corporations that won’t solely go public but additionally be needle-moving for the economic system,” mentioned Mohan.
Common Catalyst plans to speculate between $500 million to $1 billion in India over the following three years, mentioned Arora, who beforehand served as chief enterprise officer at WhatsApp and performed an instrumental function within the immediate messaging app’s sale to Meta.
The brand new allocation positions Common Catalyst among the many largest enterprise capital companies in India, alongside the likes of Lightspeed, Accel, Elevation, and Nexus, which have every raised between $500 million and $700 million of their current funds. Peak XV Companions (previously Sequoia India and Southeast Asia) leads the pack with $2 billion to deploy within the nation.
Common Catalyst isn’t buying Enterprise Freeway’s previous startup portfolio holdings, however will think about them “very a lot a part of the GC portfolio going ahead,” mentioned Common Catalyst CEO Taneja in an interview with TechCrunch.
“We wish to help them the identical means we help any of our corporations in India or anyplace else on the planet,” he mentioned.
The 2 companies started exploring methods to collaborate a number of years in the past, however felt the timing was now proper. “We may have gone out and raised extra capital. That was one of many choices on the desk. However pondering from the primary rules, once we take into consideration the chance that’s in India at the moment, and what our ambitions are, it made sense for us to affix fingers with Common Catalyst,” mentioned Arora.
India, which noticed a GDP development of 8.2% within the fiscal 12 months ending March, has cemented itself because the world’s fastest-growing main economic system over the previous decade. Beneficial coverage adjustments have spurred development throughout industries, attracting a few of the world’s largest traders.
SoftBank, Tiger World, Peak XV, Lightspeed, Accel and others have deployed about $100 billion in Indian tech startups previously 5 years alone, and are starting to see some returns as many Indian companies go public. However “returns on capital in India have sucked traditionally,” Tiger World’s Scott Shleifer mentioned at a digital gathering with Indian entrepreneurs final 12 months.
India is just not new territory for Common Catalyst, which has been investing within the nation for over a decade. Its portfolio consists of fintech unicorn CRED, used automotive market Spinny, and healthtech startup Orange Well being. The agency not too long ago co-led a funding spherical with Indian conglomerate Tata in Alsym Power, an organization growing next-generation non-flammable rechargeable batteries.
Taneja anticipates extra partnerships with Indian conglomerates going ahead. “I consider that most of the conglomerates in India are very entrepreneurial and can play a big function within the development alternative of India,” he mentioned. “A number of the alternatives we wish to put money into or assist construct in India, it would make sense to radically collaborate with them.”
He added: “We now have this deep perception that while you’re reworking industries, regardless of the place you might be on the planet, it’s important to staff up with the business leaders. We do this in healthcare right here [in the U.S.] with numerous healthcare techniques, we’re actively working with varied governments in terms of coverage and points and issues like AI.”
Thursday’s announcement follows an identical transfer by Common Catalyst in Europe final 12 months, when the agency unveiled plans to merge with Berlin-based enterprise agency La Famiglia. Taneja declined to touch upon whether or not his agency will search to duplicate the mannequin in different markets.
