India: Nilekani, Helion’s Sanjeev Aggarwal plan to float $100m VC fund

Nandan Nilekani. Photo: Ramesh Pathania/Mint

Infosys co-founder and active angel investor Nandan Nilekani is in the process of setting up an investment firm in partnership with Helion Venture Capital‘s Sanjeev Aggarwal to back midstage startups, said a report in The Economic Times quoting sources.

According to sources cited in the news report, the fund is likely to have a corpus of at least $100 million, most of which will be in the form of personal capital pooled in by the two partners, while the remaining amount will come from “friends and family”.

“Nandan and Sanjeev are expected to contribute 30-40% of the corpus, and they are also looking to rope in a third partner,” said one of the sources.

The fund will look to cut cheques of $10-15 million, targeting the Series B and later stages, where funding has been constrained.

As per the report, the new fund will not pay 2 per cent of the total corpus as annual management fee to fund managers. The eventual fund size could vary between $100 million and $150 million.

Last year, Nilekani along with Ratan Tata, chairman emeritus of the Tata group, and Vijay Kelkar, former finance secretary, joined hands to start a microfinance company. Named Avanti Finance, the company was formed to focus on “delivering affordable and timely credit to under-served and un-served segments in India.”

It was also reported that Nilekani has invested around $25 million through his family office Entrust in a real estate non-banking finance company (NBFC) unit of KKR India last year.

Nilekani has emerged as one of the country’s most prolific angel investors, with over half a dozen investments in the last one year itself. It was reported that recently, he invested $10 million in Bengaluru-based e-commerce start-up 10i Commerce Services, his largest  investment yet.

Aggarwal, on the other hand, is the co-founder of venture capital firm Helion Venture Partners, which manages a corpus of over $600 million. The report however, did not mention if Aggarwal would leave Helion to float the new fund.

According to a recent report by LetsVenture, just nine out of all the startups formed in 2010 have been able to raise series B, or late-stage, capital so far. While 28 startups that were set up 2014 have received series A funding, just three have been able to raise series B capital.

The report also pointed out that 2016 saw fewer new funds coming in to invest at levels above Series B, as compared to a year ago.

Also Read:

India: Infy co-founder Nilekani invests $5m more in 10i Commerce

India: Ratan Tata, Nandan Nilekani to start microfinance company

India Digest: Fairfax eyes CSB pie; Nilekani puts $25m in KKR arm; Shriram rejig