German media group Bertelsmann is looking to invest $200-250 Mn in Indian startups over the next four years. The group aims to invest $50-60 Mn each year in funding Indian startups in areas such as ecommerce, fintech and edtech.
Pankaj Makkar, MD Bertelsmann India Investments told ET, “We made our first investment in 2013 in India. If we include the commitments that we have lined up for the next 12 months for deals that we have an outlook for, the deployment would be about $200 Mn. This is just for our follow-on investments and new deals will be over and above this.”
A growth stage strategic investment vehicle of Bertelsmann SE & Co KGaA, Bertelsmann India Investments (BII) invests a part of the profit of its parent. Three years after it made its first investment in India, BII has deployed $150 Mn in 30 deals in the Indian startup ecosystem. Some of Bertelsmann’s bets are in Indian startups such as furniture marketplace Pepperfry, online lending platform Lendingkart, music streaming app Saavn, and budget hotel chain Treebo.
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Bertelsmann typically invests in three to four new deals a year starting with Series B and Series C level. Pankaj Makkar believes that “Series B is a great space to be in right now because there is more demand than supply.” He added that though enthusiasm for ecommerce has ebbed in the last two years, yet the fund is very much looking to invest in this sector as it chalks out its India strategy and scouts for untapped pockets in version two of ecommerce companies. Besides ecommerce, it will also focus on fintech and edtech. However, it won’t be looking at making strategic buy-outs from the fund with such initiatives being driven by the parent.
Pankaj claims that, for Bertelsmann, its India portfolio fetches an extremely strong internal rate of return (IRR) between 30%-40%. However, with only three years in the country, it is still yet to make its first few exits.
Here’s a look at Bertelsmann’s investment activity in Indian startups in the last few months:
- Last month, Bertelsmann invested in the $34 Mn Series C funding of its portfolio company budget hotel chain Treebo Hotels led by Hong Kong-based investment firms Ward Ferry Management and Karst Peak Capital.
- In April 2017, edtech startup Eruditus Executive Education has secured about $8.16 Mn in a Series B round led by Bertelsmann India Investments.
- In September 2016, Pepperfry has raised about $31 Mn in funding from Goldman Sachs, Bertelsmann India Investments (BII), Norwest Venture Partners (NVP) and Zodius Technology Fund.
- In June 2016, BII invested in $32 Mn Series B round of fintech startup Lendingkart.
- In April 2016, Gurugram-based fashion discovery site, Roposo, raised $5 Mn in Series B funding from BII.
(The development was reported by ET)