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Financial Services Company Avendus Capital Acquires Mumbai Based PE Firm, Zodius Capital Advisors

Financial Services Company Avendus Capital Acquires Mumbai Based PE Firm, Zodius Capital Advisors

As Part Of The Deal, Avendus Is Looking To Launch A $250 Mn Startup Fund Under The Zodius Brand By 2018

Financial services company Avendus Capital has acquired Mumbai-based private equity firm Zodius Capital Advisors. The financial details of the transaction have not been disclosed.

Zodius Capital is a tech-focussed investment firm that backs India-centric India-centric early stage startups engaged in big data and analytics, digital media, commerce and education, among other sectors.

Commenting on the acquisition, Ranu Vohra, co-founder, MD and CEO of Avendus Capital said, “The digital opportunity continues to grow on the back of positive moves by the government like demonetisation and GST (goods and services tax). Avendus expects 20% of the Indian GDP to come from digital opportunities over the next 10 years. We expect significant value creation opportunities for investors in this sector and the new funds will address capital and strategic growth needs of companies in the consumer and digital sectors.”

Post the acquisition, Zodius co-founder and CEO Neeraj Bhargava will become the Chairperson of the investment committee, while Managing Director Shilpa Kulkarni will head the fundraising department. As pointed out by Vohra, the firm’s existing funds will continue to be managed by the Zodius team, until it decides to exit the investments.

Apart from taking over the three funds currently being managed by Zodius, Avendus Capital is also planning to raise a $250 Mn fund for mid- to late-stage startups in consumer and digital sectors by early next year. The new fund will be launched under the Zodius brand name.

Speaking about the latest development, Bhargava added, “Avendus already being a partner in the previous funds with a strong franchise in the tech/digital and consumer space is a natural home for the Zodius brand and to build the Zodius platform further into a leader in the very attractive market for growth capital funds in the Indian tech sector.”

Zodius Capital: Journey From 2011 To Present

Founded in 2011 by Neeraj Bhargava, Gautam Patel and Shilpa Kulkarni, Zodius Capital currently manages three funds. Prior to 2014, Zodius had independently raised an undisclosed amount for its fund, from which it had invested in digital marketing firm BORN (earlier known as Group FMG), artist and event management venture Only Much Louder, big data firm Antuit and financial research firm ZyFin, among others.

In 2015, the investment firm launched two additional funds, with corpus of $110 Mn and 30 Mn respectively, in partnership with Avendus. At the time of the announcement, Bhargava had stated, “The Indian entrepreneurship genie is out of the bottle and there is a lot of dealflow across the board.”

In 2014, Zodius also joined hands with KKR-backed Avendus to raise another $500 Mn fund for investing in startups specialising in high-growth digital and SMAC (social, mobile, analytics and cloud) services.

Among the startups that have raised funding from Zodius are online furniture retailer Pepperfry, online grocery platform Bigbasket, B2B commerce platform OfBusiness, AppsDaily Solutions, engineering services startup Allygrow, digital video platform Culture Machine and others.

Avendus Capital Eyeing Rapid Expansion Through Acquisitions

Avendus Capital is a Mumbai-based financial services provider focussed on customised solutions in the areas of financial advisory, wealth management, structured credit solutions, and alternative assets management. Its clients include investors, corporates, and high net-worth individuals.

The firm sold 70% of its stake to global investment giant Kohlberg Kravis Roberts and Co in a $105 Mn deal in 2015. A year later, the financial services company started its own NBFC, Avendus Finance. Recently, in August 2017, Avendus Finance announced the launch a $78.5 Mn (INR 500 Cr) debt fund to invest in promising businesses across industrial and healthcare sectors.

Around the same time, its parent entity, Avendus Capital, acquired UK-based asset management company, Ocean Dial Asset Management.

At the time of the announcement, Vohra had said, “Avendus has been consistently making efforts to bolster its asset management businesses and this acquisition is one such step in the journey of growth. The acquisition will help us scale up our public equities presence. As the public markets are deepening, we are observing a switch from mutual funds to alternate investment funds.”

The acquisition of Zodius Capital comes at a time when Avendus is competing against a rising class of VC firms like Alteria Capital, InnoVen Capital, Trifecta Capital, IvyCap Ventures and many others. In the last two years, Avendus has been on an expansion spree. With this acquisition, the financial services firm will strengthen its footprint in the Indian tech startup world.

(The development was first reported by Livemint)