Lighthouse hits $200m first close on fourth India fund

The first close – against an overall target of USD 400m – was reported by VCCircle and has since been confirmed to AVCJ by a source close to the situation. The source added that, apart from one investor that has switched strategy, every major LP from Fund III has re-upped or is in the process of re-upping. Lighthouse declined to comment on fundraising.

New investors include India’s National Investment & Infrastructure Fund (NIIF), which announced in January that it would contribute INR 4bn (USD 48.5m) to Lighthouse India Fund IV as an anchor LP. Re-ups include the International Finance Corporation (IFC), which said last August that it would put in USD 50m with an additional USD 40m for co-investment.

Last November, Lighthouse exited the bulk of its remaining stake in Nykaa once the post-IPO lock-up expired. It invested about USD 16m in Nykaa in 2018 and has returned approximately USD 210m through a partial exit when the company listed in 2021 and the subsequent public market sales, the source said.

Fund III closed on USD 230m in 2019, having received backing from IFC, British International Investment (BII), and Germany’s DEG, as well as endowments, pension funds, and family offices. As of year-end 2022, the fund had generated distributions to paid-in (DPI) of 1x, the source added.

The firm raised USD 93m for its first fund and USD 138m for its second. The DPIs on those vehicles were 1x and 1.1x.

Another liquidity event – and a partial exit for Fund II – came last year when snack food maker Bikaji Foods completed an oversubscribed IPO with a market capitalisation of INR 74.9b. Lighthouse first backed the company, which has been profitable throughout the holding period, in 2014.

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.

Investments fall in the USD 20m to USD 50m range. The GP 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.

For nearly two years through mid-2020, Lighthouse dramatically slowed the pace of investment, citing unrealistic valuations. Deals since then include a USD 27m commitment to gifting platform Ferns N Petals, contributing USD 30m to a USD 65m round for B2B medical supplies marketplace Medikabazaar, and a re-up of USD 8.5m in medical devices maker Poly Medicure.

This period also saw a partial exit from mattress specialist Duroflex, with Lighthouse realising USD 21m as part of a USD 56m investment in the company by Norwest Venture Partners. It invested USD 22m in Duroflex in 2018 and retained an equity interest worth USD 44m following Norwest’s entry.

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• Topics
• South Asia
• Fundraising
• Growth
• GPs
• India
• Lighthouse Funds
• Fundraising
• National Investment Infrastructure Fund (NIIF)
• IFC