Edelweiss PE to invest in tech firms

As part of its expansion spree, Edelweiss PE is also eyeing acquisitions in areas such as defence, energy and artificial intelligence

Edelweiss Private Equity (PE), the venture capital and private equity arm of Mumbai-based financial services firm Edelweiss Financial Services Ltd, is looking to build a robust product portfolio in the country by focussing on future demand areas including wearable technologies, internet of things, data analytics, fintech, health and hygiene. It has so far invested in five companies with data analytics company Bridgei2i being the recent one.

The fund, which was set up last year in May, is now looking to close at least two new investments over the next few weeks, one in a smart consumer appliances company, and other in a Fintech company providing business to business solution, Pranav Parikh, Head - Edelweiss Private Equity told Business Standard.

“We identify two themes when we invest— one is something  that is more domestic,  second is something that is globally competitive,” said Parikh. “We are focused on companies which we believe will grow on the back of our internal consumption story as well as those companies that are sitting in India, but are globally competitive.”

“There are multiple areas where we are proactively trying to find opportunities to partner with companies. Our thought process is to back management that can push the company to become category leader and companies that has a sustainable and scalable model for its product,” Parikh said.“One thing that we look at when partnering with companies is where this company will be in next five to ten years.The companies could be either regular business or a new age technology companies. It should not be a fad, but a sustainable solution that will see structural demand building up in the future.”

“For instance, in fitness, health and hygiene, because of smartphones and technology, the way people monitor health is changing. Younger generation is more aware about these things,” he explained.

Fitness technology firm GOQII, which is into wearable that can monitor users’ health, is one such example.The company's other investment in consumer good companies Freshee also fits into the category. “If you see our other investment in Freshee, the company has positioned itself as a brand which is into different hygiene products,” Parikh added.

According to Parikh, the central theme for Edelweiss PE for investment entails parameters like structurally growing demand due to increasing awareness as well as rising disposable income, global competitiveness and sustainable and scalable model as well as robust distribution channels for delivering the solutions. "Our approach is to partner and work closely with the companies to drive business growth,” he said.

Edelweiss PE has also invested in a smart consumer appliance company. It will formally announce the investment over the next two weeks.  

“We believe connected devices and home is going to be an exciting space to be in. And internet of things is gonna change the way we see and use the day to day devices in our homes. Targeting younger generation, we also want to sharply focus on personal care and grooming products from younger generation,” he said. “We are looking at areas that will drive consumption over the next 10 to 20 years.”

The other investment that Edelweiss PE will be closing in next couple of weeks is in the FinTech area. “The other investment area that’s close to our area of expertise and where we can be of significant value beyond capital is the FinTech area, which is core to us," said Parikh. " Some of these excluding payments are very early in the adoption stage. The government has put in a lot of initiatives around digital infrastructure building an ecosystem which further encouarages mass adoption in near future. With these developments, even payments are undergoing major changes. Apart from the B2C, we are actively researching scalable B2B opportunities, though it is still in early stages."