WestBridge Capital Partners, which raised its debut fund back during the dot com boom days in 2000, was one of the first independent venture capital firms to take root in India and survive the crash.
Westbridge raised its fund of $140 million in 2000 followed by another $200 million vehicle five years later under the same banner.
But in mid-2006, WestBridge merged its operations with US-based Sequoia Capital, one of the most blue chip firms in the business. Before merging, Sequoia and WestBridge had worked on two co-investments in India in BhartiTelesoft (now Comviva) and Mauj.
Since then the firm has raised three more funds – one venture capital and two growth funds – to take the total funds under management at $1.8 billion across five funds. The firm’s focus to invest across stages, with recent focus on public market deals, made it the most prolific investor in the Indian private equity market.
Back then the WestBridge comprised of five managing directors – Sumir Chadha, KP Balaraj, SK Jain, Rishi Navani and Sandeep Singhal. While Rishi Navani left to co-found Matrix Partners India, the remaining four have stayed as a part of the team. The initial founders of the fund were Chadha, Balaraj and Raj Dugar, who left to join Carlyle and currently heads Fidelity’s PE team in India. The rest like Jain, Singhal and Navani joined the firm later.
Sequoia was the first Silicon Valley VC firms to establish an India presence through an acquisition and one of the first major VC firms to raise an India dedicated fund. In 2008, Facebook investor Accel followed this strategy with Bangalore-based early stage venture capital firm Erasmic and setting up a $60 million early stage fund. Accel also plans a growth fund in India, a strategy similar to Sequoia’s in India, and has roped in former Apax Partners India head for the venture.
A number of Silicon Valley VCs like Matrix Partners, Mayfield also have India funds.
WestBridge Ventures I invested in early and late stage companies operating in United States and India, focusing on IT and outsourced services. WestBridge still has some exisiting investments from this funds like Indecomm Global, AppLabs and July Systems. In fact, July Systems raised a new round of funding last year in which the fund invested. Players like Khemkha family’s SUN Group and food products major Cargill Inc. were some of the investors in WestBridge’s early funds.
While WestBridge continued with its technology focus for the second $200 million fund raised in 2005, it also started to broaden its strategy with investments in diagnostics chain Dr Lal Pathlabs and Royal Orchid Hotels around the same time.
After the merger, Sequoia raised growth fund of about $400 million (Sequoia Capital India Growth Fund (I) in 2006 and made pre-IPO deals like Edelweiss and Idea Cellular. Sequoia Capital India also raised a $300 million venture capital fund in 2007 topped off with a second growth fund of $725 million in August 2008, weeks before the financial meltdown.
It remains to be seen if Sequoia continues with growth and venture fund strategy with this split.A report in 2009 said that Sequoia may be looking at bunching together its different funds into a single vehicle, including India and China. Recent reports suggest that the firm is raising a new vehicle Sequoia Capital 2010 which has secured more than $1.35 billion in commitments. The funds strategy will be to invest in early and growth stage companies located in the U.S. and in China, it curiously doesn’t mention India strategy for this fund.