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Draper Fisher Jurvetson (DFJ), Global VC firm kicking off action in India

The global venture capitalist Draper Fisher Jurvetson (DFJ) is seeking broader investment opportunities with two of its family funds DFJ Growth Capital and Element Partners — kicking off action in India. This coincides with DFJ embracing local entrepreneurship focusing on India’s bottom of the pyramid as well as rising middle-class, offering unprecedented breadth in investment choices, its managing directors Andreas Stavropoulos and Josh Stein told ET.

DFJ, a marque Silicon Valley venture capitalist associated with start-ups, such as Skype and Hotmail, is believed to be managing capital commitments of nearly $5 billion worldwide. While DFJ Growth will invest in firms with validated revenue of $5 million upwards, Element Partners is focused on clean energy and has already uncorked an investment with talks currently underway for more.

“It is getting harder for companies to go for listing. DFJ Growth would like to be a preferred co-investor in late stage development of private firms without elbowing out existing investors. We are looking at firms with established revenue model and are potential category leaders with venture returns,” Mr Stavropoulos said.

DFJ Growth is an approximately $300-million global fund while Element Partners is a $500-million multi-stage clean technology fund partnering with entrepreneurs across the lifecycle and plays the role of PE investor as well. It has made one local investment in Deeya Energy, a renewable energy storage firm, and could be in play more, as energy technology and its ecosystem offers huge potential in India.

Meanwhile, DFJ’s growing affinity for ‘bottom of the pyramid’ investments in rural electrification, water purification and solar energy also open up more opportunities in the clean energy and material science space.
“The bottom of the pyramid holds potential for entrepreneurship as much as the rising middle class. The challenges here could be execution, getting distribution rights and collecting payments. But this opportunity is significant, as India has demonstrated an ability to leapfrog, although being late,” Mr Stein said.

One of DFJ’s local investments is D.light Designs, a firm rolling out affordable energy efficient lamps in power-starved rural pockets replacing

kerosene lanterns. One of the early US venture capital firms to tap India in the mid-90s, DFJ has stepped up its presence in the country with 17 investments in the last three years. Now, DFJ’s network funds are stepping in to invest independently or in tandem with the existing operations of the core fund.

In recent years, DFJ has been investing in India from its $650-million ninth global fund. Investments in the country will account for about 15% of the corpus, even though there isn’t any hard country specific allocations. Outside the US, DFJ has direct presence only in India and China where it is chasing the local market entrepreneurs on the back of the continuing economic expansion. DFJ operates in 40 other locations mainly through an affiliation of network partners.

Besides information technology, the venture capitalist is betting on sectors, such as education, retailing concepts and brand developments, riding on the back of the domestic middle-class boom. Some of DFJ’s other Indian investments include mCheck, Reva, Cleartrip and Seventymm.

Source: Economic Times

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