BVP tweaks India strategy; more technology, early stage startups

Bessemer Venture Partners (BVP), the Menlo Park, California headquartered early-to-growth stage investor, is in the middle of small though significant transition in India. The firm has all but moved its operations to Bangalore, as it sharpens its focus on earlier stage investments in the technology domain.

The Mumbai offices, which served as BVP’s India headquarters until now, have been shuttered. The India team, led by managing director Vishal Gupta, now works out of its Bangalore offices on Vittal Mallya Road.

“This isn’t really a sudden move. We’ve been looking more closely at the technology space since 2011 and I found myself spending 2-3 days a week in Bangalore. It made sense to relocate. My personal life has certainly improved!” Gupta told us recently over a telephonic conversation.

The decision to move operations to the city that is home to India’s largest population of technology startups crystallized towards the end of last year. “We still have a couple of people in Mumbai. The transition will be complete by the end of the year,” said Gupta.

BVP has put about $500 million to work in India since it started investing here in 2006. In contrast to its preference for early stage, startup businesses in its home market, the firm fashioned itself as a growth stage investor here, open to investing in both private and listed companies. It choose to focus on sectors such as infrastructure, energy, financial services, healthcare, even hospitality. While it did not stay away from the technology sector, it has been selective with its investments.

The portfolio of over 24 companies reflects this diversity. The firm’s earliest investments here include turnkey engineering services company Shriram EPC, hospitality services company Sarovar Hotels & Resorts, starch and derivatives maker Riddhi Siddhi, renewable energy company Orient Green Power, mobile VAS company OnMobile, and financial services firm Motilal Oswal (it has exited this investment).

Following the shift to Bangalore, the emphasis on the broad infrastructure sector, which would include energy/ power, will reduce. Technology will take centerstage, as will technology enabled businesses in sectors such as healthcare and financial services. “Going forward we will probably do much less in the infrastructure space. Technology will be a prime focus as will earlier stage companies,” said Gupta.

The firm’s post 2011 technology or technology centric bets include cloud enabled software services startup Anunta, electronic electricity trading platform Indian Energy Exchange, ecommerce marketplace Snapdeal, healthcare services marketplace Remedinet, taxi booking service Taxiforsure, and online matchmaking platform

Broadly, Gupta defines the technology opportunity as technology driven healthcare and financial services, enterprise SaaS (software-as-a-service), marketplace, consumer Internet, software products that can go global, and mobile first businesses.

BVP is currently investing here from the the $1.6 billion Bessemer Venture Partners VIII which it raised in 2011. Unlike some of its peers, it does not plan to raise a dedicated country fund for India. “It it hard to write large cheques from a separate country fund. Especially, since we like to invest $30-35 million in a company over time,” he said.

Globally, the firm has over $4 billion under management and invests anywhere between $100,000 and $75 million over the lifecycle of a company.