Smile Group has created a joint venture with TPG Growth called Katalyzers to help companies from developed markets launch their products in developing markets. We spoke with Harish Bahl, who is the founder of Smile Group and General Partner in Katalyzer to know more about the new venture, how they plan to approach these markets and the relationship it shares with TPG.
Medianama: What are you going to do with $100 million funding?
Harish Bahl: First of all this is not a VC fund. This is an operating company that has been founded by Smile Group. It’s basically similar to what we have been doing in India, which is building a platform for fast growing startups in valley and other developed markets, so they can easily launch in developing markets. It is an extension of what we have been doing.
We tied-up with TPG because it provides lot more access to capital, so if need we have access to capital to expand business. Broadly our mission is to help these companies launch in emerging markets and not to structure deals in any particular way.
Medianama: So you’ll take a stake in these companies?
Harish Bahl: These could be regional joint ventures or we could be stake holders in the region as well. We are always a partner and not a services company.
Medianama: What is TPG’s role in the JV? Why TPG, why not your other partners like Ru.net?
Harish Bahl: TPG is probably best and largest in the world so a tie-up with them was a no-brainer. They have a reputation in Silicon Valley and most of the companies we are looking to partner with are in US or in the valley; TPG is familiar with them. We are not talking to very early-stage companies and the typical deal cheque size will be bigger, so you need a partner who can match up the need to the business.
RU-net is a close partner and they have invested in several of our companies. We still have a good relationship with them.
Medianama: Will Katalyzer partner with local companies for launches or will you do greenfield companies?
Harish Bahl: We will work with any company that is on a high growth path and needs a partner to take them international, especially in emerging markets. We will have offices and infrastructure and very operational.
Medianama: What happens to Springstar?
Harish Bahl: Now we may work with Springstar on a deal to deal basis. But Springstar is more focussed on Europe. Katalyzer meanwhile has a lot more operating infrastructure in terms of media, tech, offices, people on ground and capital. From a focus perspective the difference is the markets they operate in.
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