India's Nexus Venture closes Fund VII on $700m
Nexus Venture Partners has reached a final close on its seventh India venture capital fund with USD 700m in commitments, taking the firm’s total assets under management past the USD 2bn mark.
It continues a rich vein of fundraising by India-focused managers. Last year, Sequoia Capital India secured USD 2bn for its latest venture and growth vehicles. In previous vintages, the manager invested in India and Southeast Asia from a single pool, but now the businesses are separate. Elevation Capital also closed its eighth fund – and fifth as an independent entity – on USD 670m.
Fund VII marks a significant step up in size for Nexus, which targeted USD 450m in its previous vintage. Sequoia and Elevation did much the same, having raised USD 1.35bn and USD 350m when they last came to market. Prior to their most recent efforts, Nexus and Elevation maintained consistent fund sizes for several vintages, according to AVCJ Research.
The step-up tracks a surge in technology sector investment in India. In 2021, USD 11.7bn went into early-stage deals and USD 23.8bn went into growth-stage rounds. This compares to USD 4.6bn and USD 5.2bn in 2020. There was a retreat in 2022 – to USD 8.3bn and USD 10.5bn – amid challenges for the tech sector globally – but many GPs claim the market has reached an inflection point.
Nexus said in a statement that “there has been no better time for technology innovation,” pointing to a pandemic-driven acceleration in digital adoption, start-ups tapping top talent with the onset of remote working, and breakthroughs in areas like artificial intelligence (AI).
“With one of the largest developer bases in the world, India is emerging as a key innovation and talent hub for global companies driving AI and software revolution. India is also amongst the fastest-growing economies on the planet, with accelerating digital consumption powered by best-in-class mobile data networks and advanced payments infrastructure,” the firm added.
Fund VII will operate across India and the US, targeting start-ups involved in AI, software-as-a-service (SaaS), financial technology, and e-commerce. Nexus was an early mover in SaaS, using its US presence to access an emerging breed of start-ups with front offices in the US and delivery centres in India. Its portfolio includes the likes of Druva and Postman.
The firm has also invested in B2B marketplace Infra.market, insurance technology platform Turtlemint, education provider Unacademy, and rejuvenated e-commerce start-up Snapdeal. In terms of exits, Nexus benefited from the arrival of pre-profit tech companies on India's domestic markets as food services platform Zomato and e-commerce logistics player Delhivery both went public.
Nexus was founded in 2006 by Naren Gupta, Sandeep Singhal and Suvir Sujan and has offices in Menlo Park, Mumbai, and Bengaluru. Fund VII is the first to be raised since the passing of Gupta in early 2022. Sujan remains a member of the investment team, while Singhal has transitioned to an advisor role.
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