India's Lighthouse seeks $425m for Fund IV, gets NIIF commitment
Lighthouse Funds is targeting INR 35bn (USD 425m) for its fourth India fund and has signed up the country’s National Investment & Infrastructure Fund (NIIF) as an anchor LP.
NIIF said in a statement that it would contribute INR 4bn to Lighthouse India Fund IV, which is focused on high-growth companies in areas such as healthcare, speciality manufacturing, digital transformation, and consumer products and services.
The commitment will come from NIIF's fund-of-funds programme, said to be one of the largest India-dedicated capital pools of its kind globally. NIIF has USD 4.3bn under management, most of it in a core infrastructure fund. The fund-of-funds was targeting USD 1bn and had raised USD 700m – from the likes of the Asian Infrastructure Investment Bank and Asian Development Bank – as of early 2021.
The programme's first iteration is now 90% deployed across seven funds. It has also backed Eversource Capital's Green Growth Equity Fund as well as vehicles managed by Multiples Alternate Asset Management, YourNest Venture Capital, Somerset Indus Capital Partners, HDFC Capital, and Arpwood Partners.
Founded in 2006, Lighthouse has invested in more than 25 companies in India's middle market. It is led by two founding partners, Sachin Bhartiya and Mukund Krishnaswami.
The firm raised USD 93m for its first fund and USD 138m for its second. Fund III closed on USD 230m in 2019, having received backing from the International Finance Corporation, British International Investment (BII), Germany's DEG, and endowments, pension funds, and family offices.
Investments fall in the USD 20m to USD 50m range. Lighthouse claims to target companies "with offerings that are ‘relevant' today, and will soon become ‘more relevant' tomorrow," and are protected by competitive moats. The overarching theme is tapping into the growth in domestic consumer spending in India.
Last November, Lighthouse completed two partial exits from beauty e-commerce platform Nykaa, generating a more than 14x multiple. It backed Nykaa in 2018 and made another partial exit when the company listed in November 2021.
"Through its deep knowledge of the Indian investment landscape and its ability to forge strong partnerships with Indian entrepreneurs, Lighthouse has demonstrated a strong track record and will provide NIIF Fund of Funds and its investors access to high growth sectors in India," said Prakah Rao, an executive direction and CIO for indirect investments at NIIF.
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