Mayfield launches India fund

Mayfield Fund launched a $110 million fund focused on investments in India. It is the firm’s first dedicated foreign vehicle and a departure from its strategy for China.

The Mumbai-based fund will focus on mid-market companies in the technology, infrastructure and consumer sectors. Managing Directors Nikhil Khattau and Vikram Godse will work from India. Managing Directors Navin Chaddha and Robin Vasan will work from Menlo Park, Calif.

The dedicated fund differs from the firm’s approach to investing in China, where it affiliated with GSR Ventures in 2006 to raise a $75 million first fund and recently closed on $311 million toward its third fund.

“In India, we wanted to go with the Mayfield brand,” Chaddha says. “In China, people like local funds and the team was great. In India, it was a top-down strategy. You need to react to the market opportunity and react to the local opportunity.”

Mayfield India is more tightly integrated into Mayfield’s core fund, sharing two managing directors and the Mayfield branding. The two funds have an 80% overlap in their limited partners.
Mayfield closed its 13th fund in September at $395 million.

Mayfield India will look at both technology and non-technology companies with between $10 million and $50 million in annual revenue, Chaddha says. “We don’t think you need a $100 million fund to go after early stage tech opportunities. We want to play in the middle market. Primarily those would be outside of tech. If you don’t have mortar and bricks, why would you invest in clicks?”

The firm has invested $18.5 million in six companies in India since November 2006. It backed:

• Chennai-based matrimony services company Consim Info (formerly: in an $11.25 million round in January 2008.

• Haryana-based fashion-design house Genesis Colors with an undisclosed round of financing in June 2008.

• Bangalore-based design and construction company Geodesic Techniques in an $11 million round in July 2008.

• Mumbai-based wireless transactions company PayMate India in a $9 million round in June 2008.

• Hyderabad-based power-conditioning company Servomax India in a $3.8 million round in February 2008.

• Bangalore-based optical network components company Tejas Networks in an undisclosed round in January 2007.

The firm also invested $2 million in a $10 million early stage investment fund in Mumbai called Seedfund, according to data from Thomson Reuters (publisher of PE Week).

Overall, venture capitalists have kept their heads level and their rate of investment in India more or less constant from 2007, according to data from two sources.

VCs invested $678 million in 108 deals during the first three quarters of the year, according to data from research firm Venture Intelligence India. That’s a small increase from the $648 million invested across 97 deals during the same period in 2007.

Data from Thomson Reuters corroborates this slight increase through the end of November. The data, which includes several larger, non-control private equity investments, shows 220 companies receiving $2.96 billion. That’s up from the 187 companies that raised $2.90 billion during the first 11 months of 2007.

“The VC segment in India seems to be picking up momentum,” says Venture Intelligence CEO Arun Natarajan. “In 2009, while the climate for new fund-raising would be challenging, on the investment front, we see VCs continuing their current pace of investments and expanding their focus on non-tech sectors like education, cleantech, financial services and other consumer-spending related sectors.”