General Catalyst, a Silicon Valley-based venture capital group, is expanding its presence in India by joining forces with local venture firm Venture Highway and committing between $500 million and $1 billion for investments in the country.
Venture Highway investments include social commerce startup Meesho and Moglix B2B Industrial Marketplace. TechCrunch reported in January that the two venture firms were committing to a deal.
The deal will allow the combined entity to chart a multi-stage investment strategy for General Catalyst in India, spanning early- and growth-stage startups across industries, Venture Highway founder Neeraj Arora and his team told TechCrunch. GP, Priya Mohan, in an interview. .
Venture Highway, which raised $78.6 million for its second fund in 2020, has traditionally focused on early-stage investments. As part of the General Catalyst team, he will expand his mandate to new business incubation. “Our vision is to be part of building a series of companies that will not only go public but will also be decisive for the economy,” Mohan said.
General Catalyst, which manages more than $25 billion in assets, plans to invest between $500 million and $1 billion in India over the next three years, said Arora, who previously served as WhatsApp’s chief commercial officer and played a key role in the development of the instant messaging application. sale to the Meta.
The deal positions General Catalyst as one of India’s largest venture capital firms, alongside companies such as Lightspeed, Accel, Elevation and Nexus, which have each raised between $500 million and $700 million for their recent funds. Peak XV Partners (formerly Sequoia India and Southeast Asia) leads the group, with a $2 billion fund earmarked for investments in the country.
General Catalyst will not acquire Venture Highway’s portfolio, but will consider them “a big part of GC’s portfolio going forward,” Hemant Taneja, CEO of General Catalyst, told TechCrunch.
“We want to support them the same way we support any of our companies in India or anywhere else in the world,” he said.
The two companies began exploring ways to collaborate several years ago, but, Arora said, the time was right. “We could have gone out and raised more capital. That was one of the options on the table. But thinking from first principles, when we think about the opportunity that exists in India today and what our ambitions are, it made sense for us to join General Catalyst,” she said.
India has become one of the world’s fastest growing major economies over the last decade, with GDP rate reaching 8.2% in the last financial year. Favorable political changes have spurred growth across industries, attracting some of the world’s largest investors.
SoftBank, Tiger Global, Peak bag. But “Returns on capital in India have historically been poor.” Tiger Global’s Scott Shleifer said in a virtual meeting with Indian entrepreneurs last year.
India is not new territory for General Catalyst, which has been investing in the country for more than a decade. Its portfolio includes fintech unicorn CRED, used car marketplace Spinny and healthtech startup Orange Health. The company recently co-led a financing round with Indian conglomerate Tata that was raised by Alsym Energy, a company that develops non-flammable rechargeable batteries.
Taneja anticipates more partnerships with Indian conglomerates in the future. “I think many of India’s conglomerates are very entrepreneurial and will play an important role in India’s growth opportunities,” he said. “Some of the opportunities we want to invest in or help build in India, it might make sense to radically collaborate with them.”
“When you are transforming industries, no matter where you are in the world, you must team up with industry leaders. We do that in healthcare here. [in the U.S.] with many health systems; “We are actively working with various governments when it comes to policies and issues such as AI,” he added.
Thursday’s announcement follows a similar move by General Catalyst in Europe last year, when the company revealed plans to merge with Berlin-based venture firm La Famiglia. Taneja declined to comment on whether his firm will seek to replicate the model in other markets. General Catalyst is in advanced stages of closing $6 billion fund, FT reported in April.