New $100 million fund to be set up by Micromax for investment in consumer internet firms

Indian consumer electronics company, Micromax, plans to set up an independent fund, and hopes to raise up to $100 million in order to invest in India-relevant consumer internet companies across the world.

Micromax hopes to invest about $3-$5 million each in about 10-12 startups. “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 Rahul Sharma, co-founder of Micromax, speaking with The Economic Times.

“We have always aimed at creating an ecosystem, which is what we did with our first investment fund,” explained Sharma. Some of the major companies Micromax has already invested in include ixigo, Gaana, MiMedia, Scandid, Zapr, and HealthifyMe. The company has also announced that it will cash out from two of its ten investment portfolio companies by march, to offset what has been a difficult fiscal year that ends March 31, 2017. It is however presently unclear which portfolio companies Micromax will exit from.

Speaking to ET, he also added that some potential firms had already been identified for the purpose of investment, and that deals may be struck in the next 18 months. “The first investment could well be in the next six months, but it depends on fund raising,” he said. Orbit Capital, the new fund, is expecting to raise money from private equity firms and pension funds, among other investors both in India and overseas.

Kumar Shah, the head of merger and acquisitions with Micromax also named Nami Zarrighalam, CEO and co-founder of Truecaller and finch specialist Perry Blacher as a couple of the pro-bono advisors to the fund besides Micromax themselves.

In order to build value for consumers, the focus will continue to be on innovative startups with products or services that could be integrated back into their hardware or platform.

Source: [The Economic Times]

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