Bessemer Venture raises $1.6 bn venture capital fund, to invest 25% in India

NEW DELHI: Global investment firm Bessemer Venture Partners (BVP) has raised a $1.6 billion venture capital fund, a quarter of which will be invested in India. This is the eighth fund to be raised by BVP and its largest so far.

The investors are largely US-based university endowments, foundations and family offices that are looking to invest in India's rapid growth besides global market opportunities. "In the wake US Federal Reserve's policy of quantitative easing and dollar devaluation, India is among the more attractive destinations for investors," said Rob Chandra, managing partner, Bessemer Venture Partners.

This is one of the biggest fund-raising for a risk capital firm, since US-based New Enterprise Associates raised $2.5 billion in 2009. During the fiscal year that just closed on March 31, about 28 private equity and venture capital funds focused on India raised $4.76 billion. This was 60% more than the $2.9 billion raised by 14 funds in the previous year according to data collated by research firm Venture Intelligence.

"There is still enough interest in emerging markets, especially India, and fund managers with good track record should see successful fund closures," said Pankaj Dhandharia, senior partner, Transaction Advisory Services , Ernst & Young .

Bessemer, one of the oldest venture capital firms in the US, began its India operations seven years ago with an office in Mumbai. It has till date invested in 31 companies, including Shriram EPC , Orient Green Power, IL&FS Transportation Networks and Applied Solar Technologies .

"We are always in the hunt for exceptional entrepreneurs," said Mr Chandra, who was in India last year as part of the business delegation that accompanied the US president Barack Obama in November 2010. "Over the past five years, we have focused on our India investment activity and will continue to do so as we see quite a lot of opportunity," he said.

Bessemer already has $500 million in dedicated assets in India and its investments range from $5 to $30 million. The firm wants to invest in early-stage companies in the country across several sectors, including in infrastructure, financial services and consumer products.

Bessemer was founded by steel magnate Henry Phipps' family holding company, Bessemer Securities . The start-up investment operation was later spun out into Bessemer Venture Partners.

Source: EconomicTimes