Norwest shifts focus to growth equity, late-stage deals
Norwest Venture Partners, a global venture capital (VC) firm that has invested in startups such as Swiggy and OfBusiness, is increasingly looking at investing in late-stage venture and growth equity deals in India, in a shift from backing early-stage companies when it started investing in the country, a top executive of the company said.
The VC firm closed its 17th global fund on Thursday, which will also invest a significant amount into India.
“Our strategy has moved much more to late stage and growth equity in India,” Niren Shah, managing director and head of Norwest India, told
in an interview. “When we started investing in India, we were more focused on early stage venture,” he said.
Norwest began investing in India in 2005.
The firm’s strategy has particularly shifted in the last two years, where it has made a lot more growth equity bets, especially investing in financial services companies and healthcarefocused firms. In November, Norwest Venture Partners invested ₹450 crore in Uttar Pradeshbased tertiary hospitals business Regency Healthcare. In recent years, it has also deepened focus on profitable financial services firms, with investments in SK Finance, Five Star Business and Finova Capital.
“What we have recognized is that in India, it’s really important to take companies (public through an initial public offering, or IPO). For IPO, you need sort of companies which have good, strong unit economics, profitability, and so we have focused a lot more on building growth equity companies and building very strong corporate governance in those companies and to focus on taking them IPO,” he added.
Norwest has taken six of its portfolio companies public so far, and in 2024 Shah said the firm is expecting at least four of its portfolio companies to file documents and list on the Indian bourses.
The firm, which that has so far backed tech-focused companies such as Amagi Media Labs, NSE India, Five Star Finance, Infinx, Mensa Brands, Swiggy, Xpressbees Logistics, Oxyzo, Quikr and Vastu Housing, among others, is also increasing its pace of deployment in India.
From investing $25-30 million a year when the firm started investing in India, it has now accelerated its pace of deployment by almost 10-fold annually. “We are now deploying around $250-300 million a year for the last two years,” Shah added.
In terms of sectors, the firm will look to cut cheques for growth and late-stage companies across sectors such as consumer tech, or tech to the end consumer, financial services, healthcare, offline consumer sector, IT services and manufacturing.
The VC firm on Thursday closed its 17th global fund, which will also invest a significant amount in India