General Catalyst merges with Venture Highway in India push

Common Catalyst, a Silicon Valley-based enterprise capital group, is increasing its presence in India by becoming a member of forces with native enterprise agency, Enterprise Freeway, and earmarking $500 million to $1billion for investments within the nation.

Enterprise Freeway’s investments embody social commerce startup Meesho and B2B industrial marketplace Moglix. TechCrunch reported in January that the two venture firms were engaging for a deal.

The deal will see the mixed entity plot a multi-stage funding technique for Common Catalyst in India, spanning early- and growth-stage startups throughout industries, Enterprise Freeway’s founder, Neeraj Arora, and its GP, Priya Mohan, advised TechCrunch in an interview. 

Enterprise Freeway, which raised $78.6 million for its second fund in 2020, has historically centered on early-stage investments. As a part of the Common Catalyst workforce, it’ll develop its remit to incubating startups. “Our imaginative and prescient is to be a part of constructing numerous firms that won’t solely go public but in addition be needle-moving for the economic system,” mentioned Mohan.

Common Catalyst, which manages over $25 billion in belongings, plans to speculate between $500 million to $1 billion in India over the subsequent three years, mentioned Arora, who beforehand served as chief enterprise officer at WhatsApp and performed an instrumental function within the prompt messaging app’s sale to Meta.

The deal positions Common Catalyst as one of many largest enterprise capital corporations in India, alongside the likes of Lightspeed, Accel, Elevation and Nexus, which have every raised between $500 million and $700 million for his or her current funds. Peak XV Companions (previously Sequoia India and Southeast Asia) leads the pack, with a $2 billion fund earmarked for investments within the nation.

Common Catalyst isn’t buying Enterprise Freeway’s portfolio, however will take into account them “very a lot a part of the GC portfolio going ahead,” Hemant Taneja, Common Catalyst’s CEO, advised TechCrunch.

“We wish to help them the identical manner we help any of our firms in India or wherever else on the earth,” he mentioned. 

The 2 corporations started exploring methods to collaborate a number of years in the past, however, Arora mentioned, the timing was proper in the meanwhile. “We may have gone out and raised extra capital. That was one of many choices on the desk. However considering from first ideas, after we take into consideration the chance that’s in India right this moment, and what our ambitions are, it made sense for us to hitch fingers with Common Catalyst,” he mentioned. 

India has turn into one of many world’s fastest-growing main economies over the previous decade, with its GDP price touching 8.2% within the newest monetary 12 months. Beneficial coverage adjustments have spurred progress throughout industries, attracting a few of the world’s largest traders.

SoftBank, Tiger World, Peak XV, Lightspeed, Accel and others have deployed about $100 billion in Indian tech startups up to now 5 years alone, and are starting to see some returns as lots of these corporations go public. However “returns on capital in India have sucked historically,” Tiger World’s Scott Shleifer mentioned at a digital gathering with Indian entrepreneurs final 12 months.

India just isn’t new territory for Common Catalyst, which has been investing within the nation for over a decade. Its portfolio contains fintech unicorn CRED, used automobile market Spinny, and healthtech startup Orange Well being. The agency lately co-led a funding spherical with Indian conglomerate Tata that was raised by Alsym Power, an organization creating non-flammable rechargeable batteries.

Taneja anticipates extra partnerships with Indian conglomerates going ahead. “I consider that most of the conglomerates in India are very entrepreneurial and can play a big function within the progress alternative of India,” he mentioned. “A few of the alternatives we wish to spend money on or assist construct in India, it would make sense to radically collaborate with them.”

“Once you’re remodeling industries, regardless of the place you’re on the earth, it’s a must to workforce up with the trade leaders. We try this in healthcare right here [in the U.S.] with a variety of healthcare techniques; we’re actively working with varied governments on the subject of coverage and points and issues like AI,” he added.

Thursday’s announcement follows an analogous transfer by Common Catalyst in Europe final 12 months, when the agency unveiled plans to merge with Berlin-based venture firm La Famiglia. Taneja declined to touch upon whether or not his agency will search to copy the mannequin in different markets. Common Catalyst is in superior phases to shut a $6 billion fund, FT reported in April.