Mi­cro­max to Set Up $100-m Fund to In­vest in Con­sumer In­ter­net Firms

The Economic Times - - Brands: Creating Desire - Gul­veen.Au­lakh@ times­group.com

New Delhi: Mi­cro­max is set­ting up an in­de­pen­dent fund which will raise up to $100 mil­lion (`680 crore), aimed at in­vest­ing in con­sumer In­ter­net com­pa­nies across the world that have rel­e­vance to the In­dian mar­ket. The fund, in which the lead­ing home-bred hand­set maker will be the an­chor in­vestor, will look to in­vest in 10-12 star­tups with a ticket size of $3-5 mil­lion each. Mi­cro­max, till re­cently among the sec­ond largest hand­set mak­ers in In­dia, will also cash out from two of its 10 investment portfolio com­pa­nies by March, to round off what has been a tough fis­cal year through March 31 un­der­lined by in­tense com­pe­ti­tion. Speak­ing to ET, co-founder Rahul Sharma did not spec­ify which among its portfolio com­pa­nies will the com­pany exit from. “Our in­vest­ments into the 10 com­pa­nies that were made from the first fund have been very suc­cess­ful, the IRR (rate of re­turn) has been in triple dig­its, which is why we want to ex­pand the hori­zon,” said Sharma. Mi­cro­max, which has ex­panded into the con­sumer durables seg­ment, through TVs and air-con­di­tion­ers, had started its investment pro­gramme in 2014, and has used a part of the $400 mil­lion that it had set aside to in­vest in 10 com­pa­nies so far. The ma­jor ones in­clude ix­igo, Gaana, MiMe­dia, Scan­did, Zapr and Health­i­fyMe. Gaana.com, a mu­sic app, is part of the Ben­nett, Cole­man & Co, the pub­lish­ers of this news­pa­per.

“We have al­ways aimed at cre­at­ing an ecosys­tem, which is what we did with our first investment fund,” Sharma added. The new fund, Or­bis Cap­i­tal, will raise money from pri­vate eq­uity firms and pen­sion funds among other in­vestors, both in In-

INVESTMENT DRIVE

dia and over­seas.

Sharma added that some po­ten­tial tar­gets have al­ready been iden­ti­fied and deals could be struck in the next 18 months. “The first investment could well be in the next six months, but it de­pends on the fund rais­ing,” he said.

Mi­cro­max will con­tinue to fo­cus on in­no­va­tive star­tups, whose prod­ucts or ser­vices may be in­te­grated back into hard­ware or the plat­form to build value for con­sumers. The com­pany has also been try­ing to beef up its re­search and de­vel­op­ment fa­cil­i­ties and in­te­grate ser­vices into its de­vices, in or­der to dif­fer­en­ti­ate it­self in a se­verely crowded mar­ket, which is led by Sam­sung.

The new fund will have an ad­vi­sory board and Mi­cro­max has al­ready started sound­ing off key peo­ple.

“We are look­ing for en­trepreneurs who have built suc­cess­ful busi­nesses in emerg­ing mar­kets, so Nami Zar­righa­lam, CEO and co-founder of True­caller and fin­tech spe­cial­ist and founder Perry Blacher will be some of the ad­vi­sors to the fund, be­sides Mi­cro­max,” said Kumar Shah, head of merger and ac­qui­si­tions at the phone com­pany. The ad­vi­sors will work pro-bono.

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