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Editor's Letter: Home-Grown Capital

How the rise of the domestic VC and PE firms is fuelling the growth of India’s startup ecosystem and reducing dependence on overseas investors

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“It’s hard to beat a person who never gives up.”  — George Herman Ruth

Capital chases assets and a strengthening dollar has its own ramifications on the flow and flight of capital. Even a few years ago global investors, sovereign funds, pension funds, along with private equity (PE) and venture capital (VC) funds formed the pipeline sustaining Indian businesses, especially new ventures. Amidst the uncertainties that haunt economies today, companies have even turned chary of the initial public offering route of raising capital. Into this sticky terrain have entered an entirely new breed of domestic investors, themed funds and strategic investors, offering growth capital and exit routes to the initial investors.

Successful integration of the UPI-led payments framework, low-cost data access and the Aadhar ecosystem, have all enabled a pro-entrepreneurship environment. Coupled with these initiatives, could this new clutch of domestic investors, particularly high net worth individuals (HNIs) and family offices, prove the salvation that Indian businesses need? In this issue we pick the minds of home-grown investors, like Chiratae Ventures, a leading technology-focused venture capital firm, which is a growth-stage investor in the Indian market. Of its $1 billion assets under management (AUM), it has raised 40 per cent from within India.

IvyCap Ventures, a people-first, early-stage VC firm, nurtures entrepreneurs and their ideas into sustainable businesses, leveraging its global alumni ecosystem. Ankur Capital is another example of a similar fund. It is an early-stage venture capital fund investing in startups with transformative technologies for the next billion Indians. Meanwhile, the Indian Alternative Investment Funds (AIF) industry has virtually doubled in size to $72 billion in terms of AUM till September 2021 from $ 36 billion in 2016. No doubt, the Indian private equity investing space is showing signs of maturity. The market indicates that new investments account for half the VC transactions. The VC-to-PE pipeline has also been robust and consistent across the last five years. The pages ahead offer you an insight into this fascinating transition in the funds market.

We also have an in-depth feature on the growing logistics sector with a special focus on Mahindra Logistics. In the EV space, home-grown Okinawa Autotech, which recently emerged as the top seller of EV two-wheelers, is investing and expanding its manufacturing capacity. The 97-year-old Raymond brand, no doubt a household name in suitings, is foraging into green pastures like education and realty. In an exclusive interview, Raymond Group Chairman and Managing Director, Gautam Hari Singhania, talks about this transition and some more.

Of course, we also bring to you all the regular columns and features that you look forward to. Happy reading.

We hope you enjoy reading this issue.