ET Bureau | Aug 03, 2015
NEW DELHI: Northgate Capital has come in as an investor and co-sponsor in YourNest Angel Fund, making the US-based firm the third, and largest yet, institutional investor in the local early-stage venture capital fund.
Northgate currently manages about $5 billion of assets globally through a two-pronged approach: it acts as a fund of funds by investing in other funds and also makes direct investment in companies. At YourNest, it will join Small Industrial Development Bank of India and IIFL that have already come in as limited partners.
“This partnership will give us access to a greater volume of capital, as well as investment opportunities, while Northgate will have the right to invest in our portfolio of companies as they continue to scale,” said Sunil Goyal, founder and chief executive of YourNest.
The Foreign Investment Promotion Board, which vets overseas investment proposals that aren’t covered under the automatic route, had cleared the Northgate investment in YourNest Angel Fund in June.
Currently, YourNest operates a Rs 90 crore technology and consumer Internet-focused fund and has invested in seven startups, including taxi aggregator BookMyCab and speech and data software solutions Uniphore.
BookMyCab was acquired by on-demand delivery service provider Jugnoo in an undisclosed cash-and-stock deal last month.
According to Goyal, Northgate will look at investing in the series B and higher investment rounds of the startups.
Northgate, which typically invests in alternative assets, venture capital, buyouts, growth capital, distressed, special opportunities, mezzanine, and secondary funds, is a subsidiary of Religare Global Asset Management. Religare, which manages assets of about $20 billion globally, had acquired a 26% stake in YourNest in December last year.
Northgate will now replace Religare as a co-sponsor of the YourNest fund, with the latter now expected to assist the fund with its fundraising efforts for its upcoming investment vehicle.
“They (Religare) will help us in fundraising, as well as with governance at the asset management level,” said Goyal, who previously was a senior executive at Bharti Airtel.
Northgate has invested in funds operated by marquee VC firms such as Sequoia Capital, Matrix Partners and Accel Partners. Through its direct investment strategy, it has backed well-known consumer internet companies, such as Foursquare and Yelp.