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Indian venture fund Nexus India Capital Advisors has raised its second fund of $220 million. Nexus, which has fully committed its first fund of $100 million raised in 2006, will retain its policy of investing in early stage companies in the second fund too, Suvir Sujan (right), Co-founder and Managing Director of Nexus India Capital, told VC Circle in an interview. The fund was founded by Sujan, a former founder of Baazee.com (later sold to eBay India), Silicon Valley entrepreneur Naren Gupta and Sandeep Singhal of formerly e-Ventures India.
The fund will invest anywhere from $1 million to $10 million in companies belonging to sectors such as business & consumer services, clean technology, technology and media. Sujan said they will invest the second fund in 25 companies over the life of the fund. Nexus already has 15 companies in its first fund portfolio of which four were bought out from the now-closed-down e-Ventures India at cost price.
Sujan said the limited partners of their first fund have participated in the second fund too, besides they have added 8-10 more new LPs. The investors came from mainly the U.S and European region with representation from Asian countries like Hong Kong and Singapore too.
Sujan said: “We were oversubscribed. It was very tempting to take the fund size to $350-400 million.†However, Sujan said, a moderately sized fund seemed to be ideal for early stage investing. It took only less than a month for them to raise funds.
With a bigger fund size, Nexus can acquire larger stakes in companies as opposed to what it has been doing with its first fund where it had no financial muscle to participate in follow on rounds. But Sujan ruled out any possibility of Nexus turning late stage or growth investing (like its counterparts such as Matrix Partners India or Sequoia Capital India). “We want to remain solely early stage. We are not looking at growth,†Sujan said. Nexus plans to start investing from its second fund in the next few weeks.
Sujan also asserted that they will be sector agnostic while they will back only six-sigma entrepreneurs. Sujan’s definition of six sigma entrepreneurs is: They are “extremely passionate, who are able to inspire the team, who are able to build organisations, and those who listen to the gaps in the markets, who are malleable and who have market/domain knowledgeâ€.
Among the fund I portfolio companies, Sujan believes NetMagic Solutions (a web-hosting and data centre firm) could be the first company heading for an IPO. He said the company is growing at 100 per cent year on year and is likely to be a candidate for listing with significant revenues in the next two years.
Its existing portfolio includes DimDim (open source free web meetings, Dlight (LED lighting solutions for rural and semi-urban markets), games2win (Online Gaming), Kirusa (Voice SMS solutions), Komli/Pubmatic (Indian online ad network), CE infoSystems (Digital maps for India), Mistral solutions (Design and Development services for embedded systems), Mobile2Win (Mobile value added services), Netmagic Solutions (Internet infrastructure and managed services provider), Suminter India Organics (Organic farming), Unicon Investment Solutions (Retail financial services intermediary).