HarbourVest spins out part of Norwest's India portfolio

Local media reported that the fund is $300 million in size. Sources close to the situation told AVCJ that this is approximately right, with some capital set aside for follow-on and new investments. HarbourVest is the sole LP.

Avataar is led by Mohan Kumar, who previously spent nine years at Norwest investing in early to mid-stage technology and healthcare companies, and Nishant Rao, formerly of VC-backed software developer Freshworks and LinkedIn India. They will target opportunities in B2B and software-as-a-service (SaaS) start-ups.

The portfolio acquired from Norwest comprises positions in six companies: Appnomic Systems, Capillary Technologies, CRMNext, ElasticRun, Manthan Systems, and Zenoti. Of these, Capillary has raised the most capital, with more than $100 million committed across at least four rounds. Last year, the company received funding from Warburg Pincus to support expansion in China. The GP earlier led a $20 million round. Norwest led the Series B in 2014 and later re-upped.

Norwest, a global venture capital firm with $7.5 billion under management, still has a seven-strong team in India, led by Niren Shah. Current investments include online sales enablement platform MindTickle, non-banking finance companies Veritas Finance, Ess Kay Fincorp and Five Star Business Finance, food ordering and delivery platform Swiggy, and online furniture marketplace Pepperfry.

The HarbourVest-Avataar arrangement is most readily comparable to that between Lexington Partners and Madison India Capital, which saw a dozen positions acquired from Sequoia Capital India in 2016. Other global venture capital firms have used the secondary market to exit India completely, with KPCB and Sherpalo Ventures selling their portfolio to a consortium of investors and Canaan Partners offloading its assets to J.P. Morgan Asset Management.

The KPCB-Sherpalo team spun out as Lightbox Ventures, raising one fund in early 2014 to take out the existing portfolio and a second of $100 million a few months later for new investments. A $54 million top-up fund followed in 2016 and the firm recently closed its third vehicle at $209 million.

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• Topics
• South Asia
• Secondaries
• Fundraising
• Technology
• Venture
• India
• HarbourVest Partners
• Norwest Venture Partners
• Avataar Venture Partners