Sequoia Capital India, known as Westbridge Capital Partners earlier, got my attention last week with a new deal. VCCircle has a scoop on them investing Rs 120 crore in Unicon Financial Intermediaries, a financial services company founded by former Indiabulls executives Gajendra Nagpal and Ram Mohan Gupta, among others.
These guys are into commodities broking, stock broking and other non-banking finance services. Sequoia has picked up a significant minority stake — 29.09% — and some of the businesses that make up Unicon have been around since 1994-1995.
The deal, which I would classify as growth stage private equity, is one of a bunch of such deals that Sequoia has done in recent times. Others include Edelweiss Capital and Idea Cellular. They are unusual because Sequoia is essentially a venture capital investor, if you go by its Silicon Valley lineage. It does do later-stage venture investing bordering on growth deals in the Valley as well, but in India, it seems to have decided to play the private equity game without restraint. Every time I ask managing director Sumir Chadha about it, though, he comes back with an interesting term — multi-stage investment strategy — and says that venture or early stage investing continues to be a very important part of the firm’s strategy in India. Sure enough, last year, they launched a $300 million early stage fund, the firm’s third in this market.
The debate here is not about what Sequoia should or should not do in India. In fact, the firm’s positioning here is a by-product of the market itself. Several firms from Silicon Valley who have entered India recently are slowly coming around to the view that mixing up growth with early stage works better in India. We could call this the hybrid venture model, typical to India, much like the hybrid private equity model that existed in India not too long ago — firms such as ChrysCapital and ICICI Venture played in both early stage and growth deals until a few years ago.
Keep close tabs on Sequoia’s future moves to understand how the hybrid venture model will evolve.
Image Courtesy: Sequoia Capital
it is strange, no one seems looked under the carpet,unicon is a group of jugllers,speculators, who else can know better than me, have been there as head RMS for few month.Promoters have art to sell and selling………