Lightbox II builds on Indian legacy

While the investors had backed a total of 10 domestic start-ups, exits were less forthcoming. Six unrealized investments were still sitting in the portfolio.

Sandeep Murthy, who had been managing investments on behalf of KPCB and Sherpalo since 2005, saw an opportunity. He decided to start where the other two left off by launching his own venture capital fund with the previous investment team. And so Lightbox was born.

"Sandeep got the group together and said there was a great opportunity if we could buy the portfolio," recalls Prashant Mehta, a partner at Lightbox. "We had the team, we knew the market opportunity; all we needed to do was raise extra capital to buy the companies from KPCB and Sherpalo."

Institutional investors agreed to put up the capital and the six companies were brought over. They included refurbished goods online retailer GreenDust, online photo printing service provider ZoomIn, GPS mapping service MapMyIndia, mobile commerce firm PayMate, e-commerce site FutureBazaar, and renewable energy enterprise Kotak Urja. They formed Lightbox I.

However, in addition to tapping LPs for cash to acquire the legacy portfolio, Lightbox wanted fresh capital to invest to the next batch of up-and-coming Indian start-ups. So they launched Fund II at about the same time.

"We set out to raise $90 million and had met various different Institutional investors, but due to the increased demand we saw in the market, and the excitement about what we are doing, we decided we needed to increase the fund to $100 million," says Mehta.

While the acquisition of assets for Fund I was supported by a group of secondary investors, Fund II - which reached a first close at $25 million in April and then a final close of $100 million last week - featured a mix of institutional investors such as endowments, funds-of-funds and family offices. There is no money from within India.

The new fund will continue with the same strategy as before, focusing on early-stage consumer tech companies across segments such as healthcare, speciality e-commerce and financial services products.. Lightbox II will also limit the number of start-ups it backs to eight, investing at Series A stage. A debut investment has already been completed: the GP contributed INR120 million to Embibe.com, an online test preparation portal specializing in engineering entrance examinations.

Mehta argues that Lightbox's timing could not be better. "I think now is a really good a time to be investing in India," he says. "First, we've had the election and it has helped increase people's enthusiasm for India. Second, the fundamentals for the internet consumer are looking stronger than ever before."

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• Topics
• South Asia
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• India
• Kleiner Perkins Caulfield & Byers
• Venture
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