General Catalyst is a Silicon Valley venture capital firm that is expanding its presence into India by joining forces and investing $500 million to $1 billion in the country.
Venture Highway has invested in social commerce startup Meesho, and industrial B2B marketplace Moglix. TechCrunch reported that in January, and two venture firms were negotiating a merger.
In an interview with TechCrunch, Venture Highway’s Neeraj Arora and General Partner Priya mohan explained that the deal will allow the combined entity to plot a multistage investment strategy in India for General Catalyst, covering early- and growth stage startups across industries.
Venture Highway, which raised $78.6 millions for its second fund in the year 2020 has traditionally focused on investments at an early stage. As part of General Catalyst, it will expand their remit to include incubating startups. “Our vision is that we will be a part of building companies that not only go public, but also move the needle for the economy,” Mohan said.
Arora, who was previously the chief business officer of WhatsApp and played a key role in its sale to Meta, has said that General Catalyst plans to invest between $500m and $1bn in India over the next 3 years.
General Catalyst is now one of India’s largest venture capital firms, along with Lightspeed, Acceleration, Elevation, and Nexus. These firms have raised between $500 and $700 million each for their most recent funds. Peak XV Partners, formerly Sequoia India & Southeast Asia, is the leader with a $2 billion investment fund.
Hemant Taneja is the CEO of General Catalyst. He told TechCrunch that General Catalyst will not be acquiring Venture Highway’s portfolio. However, it will consider Venture Highway’s portfolio to be “very much a part of the GC Portfolio going forward.”
He said, “We want [these portfolio companies] to be supported the same as we support our other companies in India and anywhere else in the globe.”
Arora said that the two firms began exploring collaboration several years ago. However, the timing was right for the moment. “We could have raised more capital. This was one option. When we looked at the opportunities in India and our ambitions, it was logical to join forces with General Catalyst.
India has been one of the fastest-growing major economies in the world over the last decade. Its GDP rate reached 8.2% in the most recent financial year. Favorable policy changes spurred growth in all industries, attracting the largest investors in the world.
SoftBank, Tiger Global and other investors have invested about $100 billion into Indian tech startups over the past five years. They are now beginning to see returns as some of these firms go public. Tiger Global’s Scott Shleifer told Indian entrepreneurs at a virtual meeting last year that ” returns in India have historically been sucked “.
General Catalyst has been investing in India for more than a decade. Its portfolio includes the fintech unicorn CRED as well as used car marketplace Spinny and healthtech startup Orange Health. The firm co-led with Indian conglomerate Tata a funding round that was raised by Alsym Energy a company that develops non-flammable, rechargeable batteries.
Taneja expects to see more partnerships with Indian conglomerates in the future. He said that he believed many conglomerates in India were very entrepreneurial and would play a significant part in the growth of India. “Some of the things we want to build or invest in in India, it would make sense to work with them radically.”
Taneja continued, “When you want to transform industries, you need to work with industry leaders, no matter where in the world you are.” “We do this in healthcare [in the U.S.] by working with many healthcare systems. We are actively working with different governments when it comes policy and issues, and things like AI.”
General Catalyst made a similar announcement in Europe last summer, when it announced plans to combine with Berlin-based venture company La Famiglia. Taneja declined comment on whether the firm would replicate the model in another market. General Catalyst has advanced to the final stages of closing a $6 billion fund. FT reported in early April.