Nexus raises $220m India fund

Nexus India Capital, and early-stage investor, has closed its second fund on $220 million (€149 million).

The fund will invest in early-stage companies that have significant market opportunities in India. Nexus India Capital II will focus on the consumer services, business services, technology, clean technology and media sectors, and will invest up to $10 million in each transaction.

Nexus invests mainly in companies that are either wholly based in India or have a substantial chunk of their operations there. Its first fund was a $100 million early stage vehicle that closed in July 2007.

Atish Babu, an investment associate at Nexus, told PEO that the firm is looking to make between 20 and 25 investments from its new fund.

At a time when a number of Indian firms are raising relatively larger growth and expansion capital funds, he said that it was something Nexus gave thought to as well, especially considering that they were in a position to raise a larger fund. However, the firm decided to limit the size of its fund and to maintain its focus on early stage investing, as that is the space where most of the team's experience and background lay, he said. “That's where we can add most value to the firms we work with.”

Furthermore, he added, there are already a large number of funds that are already providing growth capital and late stage financing to Indian companies. In comparison, there are still a number of start ups in the country that are looking for venture financing.

The firm has made 13 investments from Fund I. A few of its portfolio companies in the technology sector include Games2win, an online gaming website; NetMagic Solutions, an internet infrastructure and managed service provider; and Dimdim, a website providing free web meeting services.

It has also invested in Suminter India Organics, an exporter of organic spices and other agro-products; and Unicon Investment Solutions, a retail financial services intermediary.

The venture capital firm normally invests in six to eight companies each year. Established in 2006, it has offices in Mumbai and Menlo Park, California, and a team of seven investment professionals.