Nexus India Capital, a Mumbai-based venture capital fund with $320 million (Rs 1,568 crore) under management, is looking at infusing investments into two Hyderabad companies.
“We currently have five to six companies from Hyderabad on our radar and expect to start investing in two of these firms from our second fund of $220 million (Rs 1,078 crore) in early 2009,” director Sandeep Singhal told Business Standard.
Nexus, which completed its $100-million fund in October 2008, was founded by three entrepreneurs – Sandeep Singhal, co-founder and CEO of healthcare outsourcing company Medusind Solutions, Naren Gupta, vice-chairman of embedded systems software firm WindRiver Systems, and Suvir Sujan, co-founder of e-commerce company Baazee.com.
The fund typically invests behind 6-8 entrepreneurs each year, besides providing support in terms of recruiting senior talent, strategy formulation, making decisions for business development and guidance for future financings.
Its portfolio comprises over a dozen investments. These include financial services firm Unicon Financial Intermediaries (Rs 120 crore with Sequoia), carrier-neutral managed services provider NetMagic (Rs 80 crore with Fidelity International), contract farming company Suminter India Organics and online gaming company Games2Win and a few undisclosed companies. In Hyderabad, it made a $8 million (Rs 39.2 crore) investment in open source web meeting company DimDim in two rounds between January 2007 and mid 2008.
Singhal said the VC was focusing on guiding US entrepreneurs head to India to start companies in areas including software, hardware systems, healthcare, pharmaceuticals and biotechnology, alternative energy, clean water and sustainable agriculture for parking its investments. “In all, we may end up doing six to 10 investments in India during next year,” he added.
The VC fund’s initial investment is typically about $5 million. “Our ‘sweet spot’, however, is between $500,000 to $7 million in the first round and up to $20 million over multiple rounds with the typical holding period being four to six years,” he said, adding that the VC firm expected its current fund to be exhausted over the next three to four years.
