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Helion Venture Partners is planning to float its fourth fund this year, whose size is expected to be $200-250 million, sources said. Like its previous funds, this will also focus on the information technology (IT) and technology-enabled plays.
Alok Goyal and Srikanth Sundararajan, partner and venture partner, respectively, at Helion confirmed the new fund will be launched in 2015, but did not comment on the fund's size.
Helion had launched its first fund, of $140 million, in 2006. This was followed by a $210-million fund in 2008 and a third one of $255 million in 2012.
According to Srikanth, the India-focused early- to mid-stage venture fund has been investing primarily in IT plays and IT-enabled consumer and business services start-ups in sectors such as outsourcing, internet, mobile, technology products, retail services, health care, education and financial services. The first two funds are fully deployed and the third one is almost so.
While the first fund was completely IT focused, 90 per cent of the second was also deployed with a focus on technology so was the third fund, though it invested in other sectors as well, such as green tech (Azure Power), education (GTT, Attano, Vienova), financial services (NetAmbit, Shubham), health care (Eye Q, LifeCell), and IT-enabled real estate plays. Srikanth and Goyal said the fourth fund would not change its focus on IT and related segments. According to Srikanth, compared to 2013, last year was a good one for start-ups and associated investors. A lot of entrepreneurs came with good ideas and were looking to connect with investors such as Helion. Besides, the change in government policies had also served to buoy overall sentiment in the start-up space.
Goyal and Srikanth reiterated that like other venture capital firms, Helion is bullish on India. According to them, India is the third-largest digital economy in the world, after the US and China.
When Helion started to invest, there were only about 20 million internet users in India. Today, the number is around 300 million and growing.
According to Srikanth, entrepreneurship has become more main-stream in India and many people now want to join or create start-ups. There is a huge demand for early as well as late-stage capital, considering the fact that many companies want to stay private for longer periods, he added. This serves VC firms well, as the horizon aligns well with their fund lifecyle. Entrepreneurs are more willing to stay the course and are focused on building companies that can be global leaders.
On Helion's approach towards portfolio companies, Srikanth said: "We don't want to manage the company or force our views on the entrepreneurs. We believe in the team and we simply want to lend our expertise when required."
Since its inception in 2006, Helion has invested in about 50 companies in various sectors including consumer tech, enterprise tech (business and infra), and technology-enabled services, among others.
So far, Helion has exited from three companies including MakeMyTrip in 2010 (through initial public offering), RedBus in 2013 (Nasper acquisition) and Amba Research in 2013 (Moody's acquisition).
