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Exfinity Ventures, the venture capital firm started by information technology sector veterans plans to set up two new funds.
The combined corpus of both funds, which include an offshore one, should be nearly Rs 1,000 crore. Exfinity is awaiting approval from the Securities and Exchange Board of India (Sebi) for its second fund in India, of around Rs 250 crore. The offshore fund, to be based out of Mauritius, will have a corpus of $125 million (Rs 790 crore).
The company's founders include former Infosys directors T V Mohandas Pai and V Balakrishnan, and former Wipro joint chief executive Girish Paranjpe. The offshore fund will give Exfinity the flexibility of investing in technology start-up firms in the US and Singapore, as regulatory requirements in the country do not allow India-based funds to invest more than 10 per cent of the fund value in companies located outside the country.
From its first fund of Rs 125 crore, Exfinity has invested in two US start-ups. "From our first fund, we have already invested around 60 per cent in five companies and are in the process of investing in another four or five (start-ups). We need the remaining 40 per cent for follow-on rounds. The opportunities are much bigger, for which we are in the process of setting up the next fund, of Rs 250 crore," Balakrishnan told Business Standard.
He said the company would file applications for the $125-mn offshore fund in three months and expects approval from the authorities in Mauritius in another three months. On the problem with regulations here not allowing investing of more than 10 per cent of a fund outside of India, he said: "This is happening at a time when most start-ups are getting incorporated outside of India. Though Sebi had assured it would increase the limit to 25 per cent, we don't know when they will do it."
As noted, from its first fund of Rs 125 crore, Exfinity has invested in five companies, which include two US-based ones - LensBricks, a smart sensing technology firm and Virtual Power Systems, a US-based start-up that helps reduce power costs of data centres by half.
In India, its investment are in Bengaluru-based Riversilica Technologies, a firm that builds solutions for IP-streaming video delivery; Mad Street Den, a Chennai-based computer vision and artificial intelligence company; and a local subsidiary of US-based digital connectivity firm Uniken.
Typically, Exfinity's focus has been investing in the pre-series 'A' stage in technology start-ups which it believes can be a disrupter in their own spaces. The fund typically invests $2-4 mn. The new funds will allow flexibility to invest in Series A and B rounds, Balakrishnan said.
The new funds will have money from existing investors and also raise money from wealthy individuals and hedge funds globally.
"If you look at IT services, it's a $125-bn industry today, and it purely came from services. The next $100 bn is going to come from all the new areas - digital, mobile, cloud and all that. We would continue to invest in these areas," he added.
Apart from Balakrishnan, Pai and Paranjpe, former I-Flex India chief executive Deepak Ghaisas is a founding partner. In the second fund, former Wipro chief financial officer Suresh Senapaty will be a partner and investor.
