GA plans to invest money in Indian tech startups

Team StartupcityOne of the top firms in the PE industry, General Atlantic (GA) is likely to back more Indian consumer technology startups. It anticipates to evaluate companies in early stages, a top executive at the fund said, in keeping with its recent bullishness on the sector. New York-based General Atlantic manages $35 billion in assets across the world, and has been among the rare growth-stage funds to make several bets on fledgling companies in the domestic technology space even as most peers steered clear of these high-burn and steeply valued companies.

Sandeep Naik, the managing director and head of India and Southeast Asia notifies that the firm will begin evaluating companies early on and
invest anywhere between $25 million all the way up to $500 million in one company.It will evaluate more companies at early stages than it has done previously, as part of its global focus on what are described as emerging growth companies.

Earlier GA has backed educational technology company Byju’s, online learning platform Unacademy and real estate portal NoBroker, and will explore more such opportunities as consolidation kicks in and valuations soften. This is a vastly different approach from earlier towards the fast-growing technology sector.

Historically, we intentionally stayed away from consumer technology in India. It was a deliberate play, as the unit economics of the business were not correlated to the valuations. For the majority of the past 7-8 years, consumer tech companies burned capital to acquire customers and get them to adopt their offering,” mentions Naik.

The firm recently ploughed fresh capital into Byju’s and NoBroker, even as many in the industry said the continued bets stemmed from the exponential valuations it saw in Byju’s since its first cheque in Byju Raveendran’s firm in 2018 when it was valued at a shade over $5 billion. Byju’s is currently valued at $10 billion.