KKR veteran Sanjay Nayar hunts for India's next startup stars with new fund

Sanjay Nayar, a KKR Co. adviser in India, is setting up his own venture fund targeting early-stage startups at a time when some of the country’s most-celebrated tech firms are suffering from tanking valuations.

Sorin Investment Management, whose name comes from Romanian word for sun, has raised $125 million from investors including family offices of Nayar and the Benga family of Caravel Group, Nayar said in an interview in Mumbai on Wednesday. The fund plans to back about 10 startups, focusing on sectors including consumer tech, fintech and software-as-a-service.

Nayar’s fund is scouting for opportunities as titans of venture investing from Tiger Global to SoftBank Group Corp. are nursing quarterly losses following the tech rout. Sequoia Capital had warned the founders of its approximately 250 portfolio companies in May that the good times are not only over for startups, there’s no indication when they’ll return.

“Startups who thought VCs were waiting with a lot of dry powder on the sidelines are proven wrong now, and this funding aberration has come as India’s startup ecosystem reached an inflection point,” said Nayar. “We will operate in that gap and will be backing companies with capital along with solid advice and global perspectives.”

Nayar, 62, starts his own fund after spending 39 years in India’s financial circle. He was handpicked from Citigroup Inc. in 2008 by KKR’s co-founder Henry Kravis to lead the alternate asset manager’s India business. Nayar left his role as the private equity fund’s India chief executive officer in December 2020, though he continues in an advisory role at the firm. He’s also a member of the board of US-India Strategic Partnership Forum.

Nayar’s family invests in the country’s tech sector as well. It holds more than a 52% stake in FSN E-Commerce Ventures Ltd., an e-commerce site for beauty products founded in 2012 by his wife, Falguni Nayar. The Mumbai-listed company has a market value of about $9 billion. The family also has a more than 30% stake in fintech startup Flexiloans.

Sorin Investment has an option to scale up later and raise money from other institutional investors. The Mumbai-based fund, with its six-member team, will soon start its hunt for investment targets.

“There is a gap to be filled in the early-stage investment ecosystem in the country, and our fund will operate in that gap. We will not be rash or brash about it, but will approach it in a steady manner,” Nayar said.