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Falcon Edge Capital raises USD 300 million India-focused fund

It has been backing Indian tech startups since 2014 and is best known for investing in Ola, Mswipe, Bounce, and Quikr.

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In a move that marks the growing confidence in the Indian startup ecosystem, the third-largest in the world, American investment firm Falcon Edge Capital has raised its first India-focused fund of USD 300 million to invest in early-stage startups.

Local media Economic Times (ET), citing three sources, said Falcon Edge Capital closed Alpha Wave Incubation (AWI), backed by the Government of Abu Dhabi and other investors from the UAE.

Through AWI, the New York-headquartered investment firm will write cheques to 60-80 early-stage tech companies, looking for funding in angel, seed, and Series A round. It will particularly keep a keen eye on startups with artificial intelligence and machine learning capabilities, across India and Southeast Asia, the ET report said.

AWI’s future portfolio companies will need to have a core technology team stationed in Abu Dhabi, as per the deal made with its Limited Partners (LPs), the report added. The technology present in the UAE is expected to help the Middle East build the “right talent pool” in the long term. A dedicated team will run the fund, which will invest “up to USD 5 million in startups.”

Falcon Edge Capital entered India in 2014 with its investment in online house rental startup Housing.com. It is best known for backing ride-hailing giant Ola, point-of-sale solution startup Mswipe, dockless scooter app Bounce, news platform DailyHunt, digital ledger firm Khatabook, online classified major Quikr, and social buying platform DealShare. So far, it has been investing in growth and late-stage startups through its global fund, which it plans to continue doing. One of the sources quoted above said the US hedge fund has “already deployed USD 100 million via its India Disruption Partners entity.”

Globally, its portfolio companies include Elon Musk’s aerospace manufacturer and space transportation services company SpaceX, Alibaba’s fintech company Ant Financial, San Franciso-based ride-sharing platform Lyft, and China’s mobility giant DiDi Chuxing, among others.

Major global investors are in the process to raise India-specific fund to make some big bets in the South Asian nation. Silicon Valley-based investor Sequoia Capital is reportedly raising USD 1.25 billion for the seventh India fund—its largest fund in the country to date. Sequoia would invest a part of this fund in early-stage startups. Similarly, the US-based hedge fund Tiger Global—known for its knack of identifying potentially successful technology companies—raised USD 3.8 billion for its investment vehicle Tiger Global Private Investment Partners XII to back startups in the US, China, and India.