Serial entrepreneur GSK Velu has set up two investment vehicles — a $100 million venture capital fund called Stakeboat Capital and a family office with a corpus of $75 million, according to a report in The Economic Times.
“Just like a stakeboat helps other boats navigate the race, our fund will steer entrepreneurs towards building sustainable and successful businesses,” said Velu, who will be the anchor investor in the new fund, contributing $20 million.
The remaining funds will be raised from domestic family offices and large institutional funds.
While Velu will be the non-executive chairman of Stakeboat, the fund will have two general partners— private equity veteran Kandaswamy Chandrashekhar and Athmanathan Ganesan, who has been associated with Velu for a long time.
“We will hit the ground running,” said Chandrashekhar. “Using funds from our anchor investment, we plan to close some deals before going out in the market to raise funds.”
Even as the firm awaits the approval of Securities and Exchange Board of India, the general partners are actively examining deals. The firm is looking at a seven-year fund with an optional ‘plus two’ and an investment window of four-five years in each investee company.
The fund plans to ride major themes such as healthcare services, consumer- led companies and enterprise technology, but will avoid the crowded consumer internet space.
The GPs are targeting Series B investments in companies with established cash flows and proven business models. “There is a gap in the market,” said Chandrashekhar.
“There is a lot of competition in the seed funding and Series A funding space. Most funds are concentrated on some sectors like consumer internet. We will fill that gap by targeting mature companies needing growth capital and by being diversified in our approach,” he added.
Both Stakeboat and the family office will also co-invest in deals where capital requirements are larger. “The family office investments will be longer term and more strategic in nature,” said Ganeshan, who will lead the family office.