Mayfield Fund, one of the oldest venture capital firms from Silicon Valley, has reached $86 million for its second India-focused fund over an year after launching the process, said sources familiar with the development. Mayfield India II will be the successor to Mayfield India I, which raised $111 million in late 2008 and the VC firm has been investing in the country through this fund.
According to sources, Mayfield is targeting $100 million for the fund and could wrap up fundraising in the coming months. The firm is not expected to make any interim closes and targets a straight final close, they said.
The fund is targeting international institutional investors and has managed to raise the $86 million from seven limited partners. While the target for the new fund is lesser than the first fund in dollar terms, Mayfield will be able to deploy more capital given the depreciation of the Indian rupee.
Nikhil Khatau of MF Advisors declined to comment when contacted by VCCircle.
Although Mayfield is a technology-focused investor in Silicon Valley, it has also been an active venture investor in non-technology companies in India. It is expected to continue this strategy with the new fund. Mayfield India focuses on consumer services, internet, mobile, technology and technology-enabled services, logistics and agriculture-related business.
This strategy paid off when Mayfield exited bulk logistics solution provider Fourcee Infrastructure Equipment at 10x after the company raised $104 million from private equity major, General Atlantic.
Several of Mayfield's portfolio companies have managed to raise follow on rounds of funding at a higher valuation. Its portfolio companies like agriculture logistics company Sohanlal Commodity Management and high-end apparel maker Genesis Colors have attracted follow-on rounds from Everstone Capital and L Capital Asia, respectively.
More recently Bertelsmann India Investments, the investment arm of German media giant Bertelsmann, led $12 million round in Mayfield's Chennai-based portfolio company India Property Online Pvt Ltd (which runs an online platform listing residential properties for buying & selling and run through IndiaProperty.com).
Mayfield’s other portfolio companies include Bharat Matrimony (India’s largest matrimony company), Dealsandyou (a daily deals portal), Geodesic Techniques (a specialty construction company), Beer Cafe (a resto bar chain) and Securens (alarms system monitoring). Its earlier investments include PayMate India and Tejas Networks.
Mayfield typically invests between $5 million and $15 million in its portfolio companies with revenues ranging between $5 million and $50 million.
Mayfield's fundraise comes when India story has taken a major hit with the country facing macroeconomic headwinds like slowing economic growth, widening current account deficit and outflow of foreign investment. Besides, the PE industry is plagued with lower returns and relatively few exits as capital markets, the main source for exits, have remained shut. This is coupled with the depreciating currency and increasing corporate governance issues in portfolio companies.
Besides its exits and portfolio companies, what would also have worked for Mayfield is the realistic target size of its fund which remains true to its existing strategy. LPs are increasingly preferring funds with size below $250 million, as could be seen by some of the recent successes like India Life Sciences Fund II, BanyanTree Capital, Motilal Oswal PE and Ambit Pragma Ventures.
There have been some exceptions like Manish Kejriwal-led Kedaara Capital, which raised a $540 million maiden offshore fund and Tata Opportunities Fund, which mopped up $600 million.
(Edited by Joby Puthuparampil Johnson)