General Catalyst Merges With Venture Highway To Expand India Play

US-based venture capital firm General Catalyst has announced its merger with Delhi NCR-based early stage investment firm Venture Highway to expand its presence in India.

However, the financial terms of the transaction were not disclosed. 

Founded in 2015 by former WhatsApp executive Neeraj Arora, Venture Highway counts Meesho, MPL, Moglix, ShareChat and SigTuple among others as portfolio companies.

Post the merger, the Venture Highway brand will cease to exist, creating a combined entity named General Catalyst India, which will invest $500 Mn to $1 Bn in early and growth stage startups in the country, Economic Times reported.

“We are excited to announce that Venture Highway (VH) is merging with General Catalyst (GC) to lead GC’s initiatives in India and to seek to create one of the most powerful venture platforms to support the next generation of entrepreneurs in India,” GC said in a blog post.

This merger unites one of the world’s largest and most respected platforms with a highly reputed Indian seed investment team, reflecting perfect alignment in culture, people, and vision, it added.

Priya Mohan, managing director of Venture Highway, reportedly said that the transaction doesn’t involve a purchase of the fund’s existing portfolio companies. Along with Arora, Mohan will head General Catalyst’s India efforts.

With over $25 Bn in assets under management, General Catalyst has backed more than a dozen Indian startups, including CRED, Spinny and Orange Health.

It’s not the first time a global venture fund has acquired an Indian VC to broaden its presence in the Indian startup ecosystem. In 2013, US-based Accel Partners joined hands with Bengaluru-based seed stage VC Erasmic Venture Fund to launch Accel India.

The development comes at a time when multiple global venture funds have either pulled out of the Indian market or pumped the brakes on their investments in the country. 

While Sequoia India spinned off from its US parent to rebrand as Peak XV Partners,  Omidyar Network, backed by eBay founder Pierre Omidyar India will completely transition out of the Indian market by the end of 2024.

According to Tiger Global partner Scott Shleifer, the main reason behind the investors’ change of heart is the lack of big returns from India.

However, notwithstanding with the exits, Saudi Aramco’s venture capital arm is building a team in India and is looking to invest in early-stage startups in the country.

Apax Partners is also planning to accelerate its investments in India across pharmaceutical, consumer, consumer derivative and tech services markets.