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Lightspeed Venture Partners to raise USD 300 million for third India-focused fund

It earned around USD 900 million in two partial exits in India market last year.

Silicon Valley-based venture capital firm Lightspeed Venture Partners which got two exits last year from its India investments in hospitality tech giant Oyo and edtech unicorn Byju’s is in the market to raise around USD 300 million for its third India-focused fund.

Lightspeed kicked off the fund-raising endeavor last month and has already informed its limited partners about the possibility of completing a fresh India fund by the next quarter, local media Times of India (TOI) reported citing sources.

“They are unlikely to raise more than USD 300 million even though there is likely to be a demand given the portfolio and exits that it has recorded,” one of the sources told TOI. Lightspeed has been investing in Indian startups since 2007 through its global pool of funds until 2015, when it raised its maiden India fund of USD 135 million. Three years later in 2018 as the opportunity to invest in Indian startups got bigger, it got around to raise USD 175 million to find new bets.

If it manages to raise anywhere between USD 250-300 million, this will be its biggest India fund to date. Locally, the operations are led by its managing partner Bejul Somaia, who recently orchestrated two successful exits worth USD 900 million. A large part of the money came from its exit in SoftBank-backed Oyo as a result of its secondary share sale, which according to several media reports reaped anywhere between USD 800-850 million. After selling a 9-10% stake in Oyo, Lightspeed still owns a 4% stake in the company which it backed in 2014.

It also made a partial exit from Byju’s in July 2019, when the poster boy of Indian edtech, currently valued at USD 8 billion, got Qatar Investment Authority to lead a USD 150 million round.

Seeing the rise in technology startups mushrooming out of India, global as well as Indian VC firms are making a beeline to raise fresh funds. Sequoia Capital India is reportedly in the process to raise its seventh India fund of USD 1.25 billion. Earlier this month, Blume Ventures announced a USD 41 million “opportunity fund” for further investments in its existing Indian portfolios.

A recent report by Bain & Company said VCs invested USD 10 billion in Indian startups in 2019 with around USD 7 billion remaining in their pocket for investments in 2020. The report said India saw a surge of 55% in VC investments in 2019 compared to 2018.