Kedaara Capital Set To Raise India’s Largest PE Fund With A Size Of $1.7 Bn

In what will be India’s biggest private equity (PE) fund till date, homegrown Kedaara Capital is reportedly all set to raise $1.7 Bn.

Sources told Reuters that the majority of the fresh capital, around 80%, will be raised from existing investors, while the remaining 20% will come from new backers. 

As per the report, the likes of US-based Cleveland Clinic and the University of Minnesota are expected to be the new joinees. Ontario Teachers Pension Plan and German insurer Allianz have previously invested in Kedaara Capital’s funds.

The new fund will reportedly invest in sectors such as banking, healthcare, consumer and SaaS. In addition, Kedaara Capital will scout both minority stakes as well as complete acquisition deals. 

According to the report, Kedaara Capital plans to announce the fund by March-end and is currently finalising documentation with the investors. While the backers were willing to commit capital in excess of $2 Bn, Kedaara Capital is said to have capped the fund at $1.7 Bn to not “strain their ability to deploy”.

Founded in 2012 by ex-Temasek and General Atlantic executives Manish Kejriwal, Sunish Sharma and Nishant Sharma, Kedaara Capital is one of India’s oldest PE firms that has backed startups like Lenskart, Perfios, and Purplle. 

The PE firm raised its maiden fund in 2013 with a size of $540 Mn and followed it up with a second fund which reached a hard cap of $750 Mn in 2017. 

The latest fund will be Kedaara’s fourth one and will be 54% higher than the third fund, which marked its final close at $1.1 Bn in 2021. 

Kedaara Capital typically invests between $25-75 Mn in its each bet, which also goes up to $200 Mn in select situations.

The overwhelming response to the PE firm’s fourth fund comes despite the ongoing funding winter as foreign investors and limited partners are eyeing a pie of India’s fast-growing economy. 

The growing Indian startup economy also presents a lucrative opportunity for these foreign backers as Indian founders build innovative solutions for businesses and consumers domestically as well as globally. 

Despite global macroeconomic headwinds, India continues to see investors raising funds in droves. Last year, 64 new funds, including venture capital funds, micro-funds, and corporate VC funds, were launched with a cumulative size of $5.6 Bn. In 2022, the country witnessed the launch of 126 funds that raised over $18 Bn for startup investments.