Russian conglomerate Sistema Public Joint Stock Financial Corporation, an active investor in the Indian startup ecosystem through its Sistema Asia Fund, is thinking of raising a larger investment vehicle next year, a senior executive at the Moscow-headquartered fund told ET.
The $120 million Sistema Asia Fund counts cloud kitchen major Rebel Foods, non-banking finance company Lendingkart and online meat and seafood brand Licious among its investment portfolio.
The fund is targeting a larger corpus – $150-$175 million, according to Sumit Jain, senior partner at Sistema Asia Fund Advisory.
“It’s a little early to talk about it – but we think we will do a slightly bigger fund next – potentially $150 up to $175 million. We think that for the stage we operate in, and the size of opportunity we’re looking at, actually warrants a slightly larger fund. And slightly larger cheque sizes, as we look at fresh deals from the new fund,” Jain told ET in an exclusive interaction.
Sistema scored an exit in August when Mukesh Ambani-led Reliance Industries Ltd picked up majority stake in online pharmacy Netmeds, a portfolio company. Last year, Sistema had also exited its investment in Bengaluru-based gifting solutions company Qwikcilver, which was acquired by Sequoia Capital and Mastercard-backed Pine Labs for an estimated $110 million.
“I’ll take you through the ones we have already exited. We had a company called Qwikcilver – which was bought by Pinelabs – we exited that almost a year and a half ago. That was a nice return for us and in quick time, too. The other one was Netmeds, acquired by Jio recently. Most of our portfolio is doing well, growing well. We will hold on to our portfolio for another 2-4 years, or even longer, as we have sufficient fund duration left,” he said.
Sistema will also look to raise domestic capital, said Jain, who joined Sistema in late 2018 after spending almost a decade at home-grown venture capital firm Kalaari Capital.
It typically invests $3-$5 million, while setting aside an equivalent sum for follow-on rounds.
“We have two vehicles as part of our Sistema Asia fund. So, we have our India vehicle, which is a rupee-denominated fund, and we have a Singapore vehicle. And then, we put money into a company, both these funds invest in parallel in their pro rata proportions of the commitment into the same company. So, we have a bunch of Indian money, which has actually been arranged into our rupee denominated AIF…it’s not finalised, but we will definitely have a rupee denominated fund in our next one as well,” Jain said.
Sistema Asia, a 2015-vintage fund, has struck about 11 investments so far. It also counts the likes of digital fitness platform HealthifyMe, AI-based speech recognition venture Uniphore and online consumer lending platform Kissht among its portfolio in the country.
“The funds are still being filled in and commitments are coming as we speak… I can tell you that the predominant part of the fund is actually sitting in Singapore, and the India portion is a relatively smaller portion… But where you finally end up, even I can’t tell you right now,” Jain added.
Sistema continues to be a prominent Limited Partner in the fund, but it will also scout for external investors to commit capital.
“We have other family offices, that investors have both from India and outside; we already have that capital in Fund One…We will continue to invite external LPs, both from India and outside, into the fund,” Jain said.