Sanjay Nayar, a veteran banker and dealmaker, has launched a new fund to invest in early-stage technology businesses, as the senior adviser of private equity firm KKR in India seeking to fill a financing gap created by global institutional venture capital firms’ cautious attitude toward India risks.
Sorin Investments, a firm created by Nayar, will raise up to $135 million for investments in Indian IT and technology businesses. According to sources, it just closed its first $100 million round and has already begun screening firms for future investments, according to Nayar.
Nayar’s early-stage fund comes at a time when the deluge of venture financing that has poured into Indian firms in recent years is drying up, and foreign investors such as Sequoia Capital are warning entrepreneurs about volatile financial markets.
“The India startups have demonstrated their abilities and showcased where they can be, because of an ecosystem in India which promotes a startup and innovation culture. The government has created a very healthy startup and innovation environment, which combined with a huge focus on digitisation of the economy, is what will encourage digital consumption and tech-enabled business models,” Nayar said. “But the system needs patient local institutional capital. More importantly, most of these first-generation entrepreneurs are brilliant but need guidance on building sustainable businesses. What we are planning is to create a platform that will help these companies graduate to the next level of their lives.”
Orin plans to invest between $2 million and $10 million in each startup over the next few years, building a portfolio of 10-15 enterprises. Sorin will concentrate their investments in Series A and B. Fintech, health tech, direct-to-consumer, e-commerce, B2B tech, and SaaS are among the industries in which the fund wants to invest.
“A bunch of 6-7 high-quality family offices are bringing in the money. We have already got requisite regulatory clearances and will be launching operations soon,” Nayar said.