Reliance Industries’ Jio Platforms is finalising an investment of up to $200 million in domestic venture capital fund Kalaari Capital, according to two people in the know of the matter. This is as per a report in the Economic Times.
The Mukesh Ambani-led conglomerate has closed a $100-million infusion, with an additional commitment of $100 million slated for later, said another person aware of the group’s plans to deepen its footprint in India’s burgeoning technology sector.
“Kalaari Capital has communicated to multiple venture funds about racking up $100 million from Reliance, with the rest of the capital…to come in over the next year,” said the report.
India’s telecom sector, in the efforts of enabling policies including more quantum of the spectrum, is set to establish new benchmarks in the next-generation network deployments and service delivery.
Vani Kola-led Kalaari Capital will look to raise the second tranche over the next 12-18 months from either Reliance or external sponsors. The venture capital firm gained prominence in the past decade by backing a string of e-commerce startups—including Snapdeal, Urban Ladder and Myntra—as well as unicorns such as online gaming platform Dream11.
With Reliance backing Kalaari as its anchor investor or limited partner, the deal will emerge as one of the largest commitments by an Indian conglomerate in a venture capital firm.
Bengaluru-based Kalaari has been in the market to raise its fourth fund for over a few years.
Notably, the VC firm had last raised a fund in 2015, when it mopped up $290 million—its largest corpus—in the backdrop of a funding frenzy in the Indian startup ecosystem.
Reliance’s backing comes after some of Kalaari’s portfolio companies—including furniture retailer Urban Ladder and lingerie retailer Zivame—were acquired by units of Reliance Industries.
“Reliance’s investment in Kalaari will give the company an early line of sight into startups and upcoming sectors,” said the report. “RIL won’t necessarily acquire all the companies in which Kalaari invests, but it will certainly act as a discovery pipeline.”
Reliance will use a two-pronged approach to take over companies that fill gaps in its capabilities, while keeping an eye on potential areas of future growth through Kalaari, said the report.
Startup entrepreneurs are of the view that it is not a secret that Kalaari has grown close to Reliance Industries in recent years. “I don’t think entrepreneurs will perceive RIL’s backing as a bad thing, but Vani does have a troubled history with some of the founders of her portfolio companies, which may be an issue,” said one entrepreneur on the condition of anonymity.
A veteran investor, Kola is known for spotting startups operating in the consumer internet space, but for the past few years, has battled top-level churn as well as disagreements and fallouts with portfolio firms and founders.
Source: The Economic Times
Kalaari, in its original avatar, was set up in 2006 when technology entrepreneur Kola, former Intel Corp Vice President Vinod Dham and former Intel executive Kumar Shiralagi launched a $190-million India fund backed by Silicon Valley venture capital firm New Enterprise Associates (NEA).
At the time, it was called NEA IndoUS Venture Partners, which became IndoUS Venture Partners when NEA decided to go solo in India after a few years. However, the final reordering happened in 2012, with Dham leaving and the fund being renamed Kalaari.