Haresh Chawla to form an entity for early stage investments

Private equity firm India Value Fund (IVFA) is expanding its investments in food and consumer internet sectors, which will be led by its partner and former Network18 CEO Haresh Chawla.

The foods and consumer internet sectors in India are going through a dramatic and secular shift with the emergence of diverse and disruptive business models, a statement from IVFA said, indicating the need for a focused investment strategy.

IVFA's core mandate is to provide growth capital and enable management transformation of mid-size companies, with proven business models. However, for these two fast-growing sectors, IVFA believes that it needs to embrace and gain a deeper understanding of emerging business models, the statement said.

Chawla will also form a separate entity in his personal capacity to invest in early stage companies from these sectors. Besides investing his own capital, Chawla will also be sourcing capital from "other high-quality investors and limited partners through an independent entity", a statement said.

"We think Haresh's passion, entrepreneurial energy and experience can be better leveraged in high-growth industries and businesses, and we see both food and consumer internet as sectors that hold a promising future for IVFA's funds," Vishal Nevatia, managing partner of India Value Fund, told  Techcircle.in.

"This arrangement will offer both IVFA and myself the opportunity to pursue two of India's most potent investment sectors – foods and digital – in a more determined manner. These sectors offer considerable growth avenues and the time is right to build the next generation of businesses in these sectors," Chawla said.

IVFA said it has committed $70 million to acquire a substantial stake in VKL Seasoning, and led the transformation of VKL into a food solutions company that provides food technology solutions to over 80 per cent of the major snack and fast food players in India. The firm has also envisaged a commitment of additional $200 million to the foods industry over the next three to five years.

The fund also wants to focus on emerging technologies on the internet and mobile platforms that are transforming business models in India and expected to create significant value over the next 5 to 10 years.

Indian internet and e-commerce companies have been attracting significant interest from large global PE and VC investors. However, homegrown PE firms have lagged behind in exposure to these sectors.

Indian tech space has seen good exits for investors in the recent past. The recent multi-bagger part-exit by Sequoia Capital in Mumbai-based Just Dial Ltd, which runs the online business directory Justdial.com, at a 30x return is an example. Online marketplace

Snapdeal recently became the second-largest internet company after Flipkart to cross the $1 billion mark of funding after Japan's SoftBank invested $627 million in the company.

Chawla, who oversaw the growth of Network18 from Rs 15 crore in annual revenue in 2000 to over Rs 3,000 crore in 2012 over his 12-year career, has been focusing on the digital and internet space in the recent past. He is also an active angel investor in several start-ups such as Housing.com. He joined IVFA in 2012.

IVFA has $1.3 billion as assets under management across four funds since 1999 and has presence across media and entertainment, healthcare, logistics, supply chain and retailing, infrastructure services, education and clean energy. The team comprises 22 senior members based in Mumbai and Bangalore. The firm has investments in companies such as Radio City, Meru Cabs, DM Healthcare, Manipal Hospitals, Trivitron, HiCare, In Logistics and Mahindra Holidays.

(Edited by Joby Puthuparampil Johnson)