Oyo-backer Lightspeed points to the third $ 300 million fund in India

Madhav Chanchani | TNN

Bangalore: Silicon Valley's leading venture capital firm is on its way to its third fund focused on India, which is expected to get $ 250-300 million for the next quarter, according to three sources familiar with the development. The new fund arrives shortly after the company has been able to complete record outings of unicorns such as Byju's in the previous year, delivering cash returns of more than $ 900 million between the two agreements.

While Lightspeed had begun to inform limited partners (LP), who are investors in PE and VC funds, about India's new fund last year, it started raising funds a few months ago. Although the size of the fund has not yet been decided, it is likely to be in the range of $ 250-300 million. It is unlikely that they will raise more than $ 300 million even though there is likely to be a demand given the portfolio and out of it. He has recorded, said one of the sources mentioned above. Lightspeed India's managing partner, Bejul Somaia, declined to comment when TOI contacted him.

Lightspeed had been active in India since 2007, investing from its global fund in the country with early bets such as TutorVista and Indian Energy Exchange, which has been successful. The firm raised its first India fund in 2015 of $ 135 million, followed by a fund of $ 175 million in 2018. It has also invested in some Indian portfolio companies through its global growth fund for larger financing rounds.

Plans for a larger fund in India come at a time when Lightspeed has become one of India's most popular venture companies in recent years. He booked one of Oyo's biggest pay days, the main hospitality center backed by SoftBank, earning between 800 and 850 million dollars selling a 9-10% stake. Lightspeed has invested a total of $ 28 million in Oyo, supporting the start for the first time in early 2014, obtaining more than 35 times returns on its investment. Continue to hold around 4% participation.

The firm also made a partial exit from Byju when the educational technology startup raised funds from the Qatar Investment Authority last year. It is said that Lightspeed earned more than $ 70-80 million since the partial exit, making more than 8-9 times returns. The other Lightspeed portfolio companies in India include a B2B trading platform valued at $ 2.8 billion and the vernacular social network ShareChat, which is backed by Twitter. He has also been one of the first sponsors of new business software companies such as Innovaccer and.

In the United States, Lightspeed is known for its initial commitment to the Snap messaging application in addition to several business software companies such as AppDynamics, Guardant Health, Rubrik, Nutanix and Mulesoft. The new Lightspeed fund comes at a time when other important and new funds are also being worked on, which indicates that despite the sobering feeling about valuation, the general capital flow in startups is not expected to decrease drastically. TOI reported on January 24 that Sequoia is raising $ 1.3 billion for two new funds for India. Tiger Global Management, which was one of the most active investors in India in 2019, also closed a new global fund of $ 3.8 billion. A recent Bain&Co report said the dry powder available for investments in new companies in India has reached a record $ 7 billion in 2019, from the previous high of $ 6.1 billion in 2018. The report added that India continues being one of the most attractive emerging markets for venture capital between LP, after Southeast Asia and China.