SAIF Partners launches seed initiative to fund early stage technology companies

Private equity firm SAIF Partners India, which has invested in large firms like Just Dial, Homeshop18, Firstcry.com, Makemytrip.com, PropTiger and One97 Communications, has recently started making early stage investments, a top official told Techcircle.in.

"Based on our experience in tech investment we realised that the growth cycles have shrunken. Initially, companies would launch an IPO in 10-15 years but now the cycles are smaller (seven-eight years), which is why we have changed the fund's lifecycle. It also makes sense from the investment time cycle and return perspective and so we decided to start playing in this area," said Mukul Singhal, principal at SAIF Partners.

With the funds' seed initiative to back companies at early stage; it will make equity investments worth $500,000 (Rs 3 crore) to $2 million. While SAIF is a $350 million fund, there is no specific allocation or amount that is earmarked for seed investment.

"About six-seven investments are in the pipeline and we could expect seven-eight more investments this financial year in the consumer internet and mobile space. The fund is open to invest in paper plans as well as companies which have a proof of concept," informed Singhal.

At SAIF, Singhal's primary area of focus is early stage investments. He had earlier worked at Canaan Partners, an early stage venture capital firm.

SAIF Partners makes privately negotiated equity or equity-linked investments in early and growth stage companies across sectors such as consumer products & services, technology, media, telecom, financial services, healthcare, travel & tourism and manufacturing. They generally make individual equity investments between $2 million and $75 million in one or more rounds of financing.

SAIF Partners has been investing in India since 2001 and currently has over 30 investments under its belt. It is currently managing over $1 billion of investments in the country.

(Edited by Joby Puthuparampil Johnson)