Exclusive: Sistema Asia Capital lines up second India fund with $150 mn target corpus

Exclusive: Sistema Asia Capital lines up second India fund with $150 mn target corpus
Dhruv Kapoor, Partner, Sistema Asia Fund
5 Dec, 2019

Growth and mid-stage focused venture capital investor Sistema Asia Capital, which primarily invests in technology businesses in India, is targeting a $150 million second fund, which it expects to launch next year. In a departure from its earlier strategy, the firm aims to raise half the proposed fund’s targeted corpus from third-party limited partners. 

Singapore-headquartered Sistema Asia Capital has been investing here for the last four years through the $120 million Sistema Asia Fund, which is backed by Russian conglomerate Sistema PJSFC. 

“The first fund was heavily backed by the parent entity (Sistema PJSFC) and we benefited from the guidance of co-investors. With the second fund, we hope to have 50% backing from the parent and will reach out to limited partners across geographies,” Dhruv Kapoor, partner at Sistema Asia Capital (India) told TechCircle.

The proposed second fund will see the firm write out larger cheques at the Series B and C stages and also lead funding rounds across select bets, Kapoor said. It will continue to back technology and technology-enabled businesses, going deeper into the fintech sector with supply chain financing, wealth management, neo-banking and blockchain applications, apart from sectors such as agritech, healthtech and edtech.

“Edtech is getting exciting and we will also focus on agritech and software plays in the construction sector,” he added. He further said that the firm will look at blockchain, AR (augmented reality) and VR (virtual reality) and machine learning companies focused on the India market. 

Kapoor, formerly vice president at Helion Venture Partners where he spent eight years, took charge of Sistema Asia Capital’s investments here about four years ago. So far, the firm, which has offices in Delhi and Bangalore, has backed 10-odd companies across sectors such as food-tech, health-tech, fintech and software as a service. 

Some of the companies in the portfolio include meat products delivery platform Licious, SME lender Lendingkart, cloud kitchens player Rebel Foods, consumer focused credit platform Kissht, and analytics platform Mobikon

It also scored a profitable exit early this year when portfolio company Qwikcilver, a gift cards solutions provider, was acquired by Pine Labs for $110 million. 

Sistema’s focus on the Series B and C stages from the proposed second fund will help plug an important gap in India’s technology funding market for follow-on capital. While the market has seen several earlier stage investors, at the seed and Series A stages, set up shop over the last few years, investors who focus specifically on mid-stage companies are few and far in between.