February 06, 2017

Micromax to set up $100-million fund to invest in consumer internet firms

The Economic Times

NEW DELHI: Micromax is setting up an independent fund which will raise up to $100 million (Rs 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., 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 India and overseas.