India's Kaizen opens US office ahead of Fund II launch

The new office - which opened this week - will be the firm's second base outside of India, where its headquarters is in Mumbai. Gaurav Jain, a principal at the firm, will share his time between India and the US while a permanent partner for the office is sought.  

Kaizen set up a base in Manila in November last year. It is understood to be seeking co-investment opportunities in the country with an unnamed local family office.

Sandeep Aneja, the founder and managing director of Kaizen, explained that the primary purpose of having a Silicon Valley presence is to give Indian education companies better access to technology innovation in the more mature US education market.

"The idea is to improve our companies on the technology front with regards to both product and marketing innovation," Aneja told AVCJ. "That can only happen in Silicon Valley where the buzz-word is innovation. Those Indian companies with a decent technology opportunity can then learn how to do better product design, better product management, and better UI design from those who know how."

He added that the office also offers the potential for deal flow involving US-based businesses seeking exposure to the South and Southeast Asian markets. This approach fits in with Kaizen's new international strategy with its upcoming Asia fund. The vehicle will launch in October with a target of $120 million and a hard cap of $150 million. 

However, rather than calling it a regional fund, Aneja said the vehicle will focus almost exclusively on five countries: India, Bangladesh, Sri Lanka, Singapore and the Philippines.

"We like Thailand, Indonesian and Vietnam but we feel there is quite a lot of local capital chasing deals in education in those regions already," said Aneja. "So we are looking at countries that we feel are underserved, where our capital can make a difference."

The fund is expected to raise around 50% of its corpus from developmental finance institutions (DFIs). International Finance Corporation, India's HDFC Banl and Bertelsmann Digital Media Investments are among the LPs in Kaizen's first fund, Kaizen Education Fund I, which reached a final close of $98 million in May 2009.

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• Topics
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