Former Sherpalo India chief floats $90M consumer tech-focused VC fund, buys part of Sherpalo & KPCB's local portfolio

Sandeep Murthy, who till recently headed Ram Shriram's venture capital firm Sherpalo Ventures' Indian operations and also oversaw activities of Kleiner Perkins Caufield & Byers (KPCB), has floated his own VC firm Lightbox Management Ltd, as per a press statement.

The VC firm has started with two funds, one of which has picked stakes in some half a dozen firms by buying existing investments of Sherpalo and KPCB in what is akin to a secondary pooled transaction. The first fund has a portfolio comprising GreenDust, ZoomIn, MapmyIndia, Paymate, FutureBazaar and Kotak Urja.

Simultaneously, it has floated a new fund with a target corpus of $90 million (approximately Rs 540 crore) focusing on early-stage investments in consumer tech space. This fund will have a concentrated investment portfolio of eight companies, in which it will invest $3-5 million in Series A funding with an investment horizon of seven-eight years.

According to the firm, the second fund has already made its first close at $25 million (approximately Rs 150 crore) with the backing of an unnamed global institutional investor.

The firm has not shared how will it spend the rest of the money from the second fund and if around half of the money left from the initial targeted investment will be used for follow-on rounds. We have reached out to Lightbox team for more information and will update the information on the second fund as also information on the transaction through first fund, as we hear from them.

In a prepared statement, Murthy of Lightbox, said, "This is such an exciting time to be active in the consumer tech space in India. So much is changing at once – growth in per capita income, urbanization, organization of retail and technology penetration. This creates opportunities that are simply unprecedented. The missing element is scale in technology penetration, which is poised to accelerate in the coming years."

Separate media reports said Sherpalo and KPCB are now focusing on the US market which explains their virtual exit with this development. Sherpalo and KPCB, however, will retain holding in some large firms such as InMobi. Techcrunch reported citing sources that the VC firms have also sold their stake in online travel agency Cleartrip to existing strategic investor Concur.

Murthy, director of Lightbox India Advisors Pvt Ltd, part of Lightbox Management, spent almost nine years advising Sherpalo on India investments, which included InMobi, Cleartrip, Naukri and Greendust. He led Series A investments and taken operational roles such as CEO and head of corporate development at InMobi, Cleartrip and GreenDust in the past.

Other partners of Lightbox Ventures include Siddharth Talwar, an angel investor who founded and later sold Evolv to NIIT; and Prashant Mehta, former CEO of Komli Media. The fund's US partners include Sunny Rao, currently CEO of ZoomIn who earlier co-founded Half.com which was acquired by eBay for $350 million; and Jeremy Wenokur, an angel investor who spent the past 17 years in the consumer technology space in the US and was Google's first corporate development person.