Goldman Sachs unit to invest in Indian fintech startups

Photo: Reuters

Wall Street bank Goldman Sachs Group Inc. is looking to invest in early-stage financial technology, or fintech, startups through strategic partnerships in India.

The investment bank’s move comes at a time when venture capital funding for startups is ebbing.

The investments will be made by Goldman’s Principal Strategic Investments (PSI) Group that makes long-term investments, said a senior executive at the firm, adding it will start investing in companies in Bengaluru and then expand to the rest of the country.

“We have a significant presence in Bengaluru, and when we think about what we can do, we think of Bengaluru as the starting point for our innovation,” said Alokik Advani, managing director and head of PSI Group at Goldman Sachs.

PSI Group has already met some companies and is assessing investments, said Advani.

The average investment size would be $2-10 million. The investments bank is open to tie-ups with other venture capital funds operating in India to invest in series A rounds.

Most investments would be strategic partnerships which will be used by Goldman Sachs.

To be sure, PSI Group, which invests from Goldman’s balance sheet, has made about 75 investments globally and 12 in the Asia Pacific region. But it is yet to invest in the Indian start-up ecosystem. In India, the PSI team looks after its vintage investment in National Stock Exchange Ltd.

Globally, the PSI Group has invested in firms such as financial communication firm Symphony Communications Services Llc, UK-based data provider Markit Ltd, Kensho Technologies Inc. and trading platforms like AG Delta Pte Ltd, BATS Global Markets Inc., among others.

“Our strategic plan is to mentor and participate with local start-ups, make strategic investments for minority stake and create partnership. If we think we can add value we can take a board seat,” Advani said.

The PSI Group will focus on investments in enterprise solutions, cloud-computing, security and data management, operations, data analytics, trading platforms, payments and crowdfunding, among other things.

“In fintech, large part of our focus is on data analytics and machine-learning, regulatory & compliance technology, which have gained traction in the last 4-5 years,” he added.

The investment banking firm, which employs nearly 35,000 engineers globally and has been projecting itself as a tech firm, is looking to do the same thing in India.

“Globally, a third of our work force is technologists; so, the focus is the same as globally. There are a lot of technology projects, and we are engaging with them deeper and working with start-ups,” Advani said.

According to VCCEdge, the financial research platform of VCCircle, venture capital funding, which hit a peak during January-March 2015, fell in the same period this year.

Between January and March this year, start-ups managed to raise just $334 million across 88 deals whereas during the same period in 2015, companies managed to raise $1.8 billion across 138 deals. The share of venture capital funding, by value, dipped by about half to 14.6% so far this year.

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This article was first published on Livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.