Sistema Asia Fund to Expand its 1st Fund to $120 Mn for Doubling its Indian Startup Investments

Sistema Asia Fund (SAF), a proprietary venture capital fund of Russian conglomerate Sistema JSFC, is in the process of expanding its first fund to $120 million in order to double down its investments in Indian startups, reported Samreen Ahmad of Business Standard.

The VC fund will invest $40 million from its own while the other $80 million will raised from external investors, including limited partners and high networth individuals (HNIs) for which the company is already in talks with several HNIs and institutions in India.

The VC Fund however is keeping up with a greenshoe option for going up to $150 million for this fund if there's an added interest from external investors.

“Seeing how our company’s portfolio has shaped up, Sistema has decided to double down on its investment in India. We are also going to broad base our fund, so it just won’t be a single LP fund,” Sumit Jain, senior partner, Sistema Asia Fund Advisory said in a statement.

An alumnus of IIM Calcutta and IIT Kharagpur, Sumit Jain is a seasoned investment banking and VC veteran who has just joined Sistema few days back. Earlier, Sumit was serving in Kalaari Capital.

SAF, which will announce the first close of the fund expansion in the next few weeks, will use some of the top-up capital to invest in its existing portfolio companies apart from making new investments, post fund expansion.

Existing portfolio companies of SAF a diverse range of startups in India, include online meat seller Licious, internet kitchen brand Faasos, health and fitness app HealthifyMe, online pharmacy marketplace NetMeds, and lending startup Lendingkart.

The complete closure of the fund is expected by early next year.

Established by Sistema in 2015, SAF was established in Singapore and invests in mid-stage (Series B and later investment rounds) high-tech companies in India and Southeast Asia that work in the B2C and B2B segments and have stable sources of revenue and potential to go global.

The fund's industry focus is consumer tech (e-commerce, healthcare, transport, media, finance and education) and enterprise tech (IoT, VR/AR, platform solutions, big data, AI and machine learning).

Netmeds Raises $14 Mn in Latest Funding Round From Investment Funds Sistema and Tanncam

Netmeds, India’s leading healthcare e-commerce portal closed its latest round of funding in which it has secured an investment of $14 million. The funding round was led by Tanncam, a Cambodian investment holding company, which was joined by Sistema Asia Fund, the India-centric venture fund, spun off by, Sistema, Russia's largest public investment holding company.

Commenting on the announcement, Pradeep Dadha, CEO, Netmeds said, “We believe that this round of funding reflects a renewed confidence in the industry and its future, brought about by both the GST and the government’s release of the draft of rules governing online pharmacies. This new seal of approval and legitimacy has reignited interest from both investors and consumers. We also believe that the investments, both made by international funds, demonstrate a healthy appetite for global investment in the Indian consumer products market and healthcare, in particular, owing to its massive potential.”

Pradeep Dadha added, “The investment will be used to continue to build upon our consumer base and expand our reach to more locations in the country. Awareness, accessibility and affordability are the key USPs of Netmeds that have made it a favourite among Indian consumers. This is reflected in our growing reach, especially in tier-2 and 3 cities, rural towns and villages which lack the options and choices that metro dwellers enjoy, and our platform brings medicines and healthcare within their reach digitally.

Tanncam Investment is an investment holding company incorporated under the laws of the Kingdom of Cambodia which invests globally in early-stage venture capital start-ups and strategic investment opportunities. Financial services company Cambodian Investment Management acted as Adviser on the transaction for Tanncam and it’s CEO Anthony Galliano commented “Cambodian Investment Management was delighted to conduct the due diligence, valuation, and negotiations for this corporate finance transaction on behalf of Tanncam. Netmeds is changing the paradigm in the pharma market in India and we strongly believe in the merits of the investment”.

The other investor in this round, Sistema Asia Fund Private Ltd., is a venture firm specialising in start-ups, early stage, mid-stage, Series-A, Series-B, and Series-C investments. The fund was created by Russian conglomerate Sistema JSFC with the goal of increasing their engagement with the Indian start-up ecosystem and capitalise on emerging opportunities.

Kirill Kozhevnikov, Managing Director, Sistema Asia Fund said, “We work with many start-ups and young entrepreneurs, but Netmeds is unique among them because it is led by such a strong and seasoned leadership. We have been very impressed by the way Netmeds has been altering the scenario of healthcare accessibility in India and are delighted to be able to contribute towards its larger mission in the country.”

Tanncamm and Sistema will join early investors Investment Bank MAPE and OrbiMed Asia, along with Pradeep Dadha and his family as equity stakeholders in Netmeds.

Russia's Sistema to Set Up 100% Arm to Provide Hands-on Business execution Assistance to Indian startups

In a news that could benefit a lot of Indian startups, Russia's $10-billion conglomerate Sistema JSFC is considering setting up a wholly owned unit in the Indian subcontinent, according to a report in the Economic Times. The Indian unit will be providing hands-on business execution assistance to Indian startups working in domains like financial technologies, ecommerce, digital analytics, etailing and lifestyle.

According to the ET report, a source aware of the matter has disclosed to them that the new Sistema India subsidiary will be handholding Indian startups under its new Scalerator platform through a host of services, including go-to-market strategies, solutions to scale up business growth and even the support of a back-up operations team, if required.

The Scalerator platform, which combines the words sale and accelerator, will be helping local startups in growing their businesses rapidly but in a cost-efficient way.

The report also revealed that the legal formalities for the Indian unit have already begun. Though the subsidiary will be registered in Singapore, Sistema’s global venture capital team is currently on Indian soil scouting promising startups in Hyderabad, Bengaluru, Chennai and Kochi, which can use some support from its Scalerator initiative to take the next leap.

The startups who make the cut might also be eligible for financing from Russian company’s proprietary Venture Capital fund, Sistema Asia Fund. The fund plans on doubling its capital for Indian startups to a whopping $100 million by early next year. As of now, the VC fund is financing startups working in the tech and consumer-tech spaces.

The startup business accelerator industry is getting bigger with each passing year, especially in the US, Canada and Europe. Russia's Sistema is focused on cracking this big opportunity after it entered the startup financing industry last year and zeroed in on India and South East Asia as it focus markets.

Russia's Sistema decided to enter the startup financing market in India after Reliance Communications, India's fourth-largest telecom operator, announced its intention to acquire its telecom unit, Sistema Shyam Teleservices, which offers mobile telephony services under MTS brand across nine telecom circles in the country.