General Catalyst, a US-headquartered venture capital firm, has announced its acquisition of early-stage-focused Indian peer Venture Highway, confirming DealStreetAsia’s report in January.
Financial details of the acquisition were not disclosed, but media reports suggested that General Catalyst will invest anywhere between $500 million and $1 billion in India over the coming years.
As part of the deal terms, the Venture Highway brand will cease to exist and all new investments will be made through the General Catalyst brand name.
“Both Venture Highway and General Catalyst believe traditional venture investing is important but insufficient for driving transformative opportunities,” according to the announcement.
DealStreetAsia earlier reported that acquiring local VC firms to expand in a region is a strategy that General Catalyst has adopted in the recent past. In October last year, it expanded in Europe by merging with Berlin-based VC La Famiglia.
General Catalyst, which has over $25 billion in assets under management, focuses on seed- and early-stage deals. It closed its last vehicle at around $4.6 billion in February 2022.
Its portfolio companies in India include aerospace defence manufacturer Jeh Aerospace, insurance startup Loop, fintech startups OneCode, Dhani, CRED, and Uni, and used car retail Spinny.
Its global portfolio includes Airbnb, Canva, Stripe, Guild, and Snap.
Venture Highway’s access to top Indian talent and its India-US focus, combined with General Catalyst’s US and European connections, positions the two to enhance Indo-US-Europe collaboration in AI, technology, industry, and talent, according to the announcement.
Venture Highway, co-founded in 2014 by Neeraj Arora, former Chief Business Officer of WhatsApp, is an early-stage-focused VC firm that closed its second fund in January 2020 at over $78 million, just before the COVID-19 pandemic.
It is known for backing prominent Indian tech startups including the homegrown e-commerce major Meesho. The firm was an early investor in Meesho and scored multi-bagger returns when it sold a small part of its stake in the firm in 2023 to PE firm WestBridge Capital.
Venture Highway is also an investor in the vernacular social network ShareChat, mobile e-sports platform Mobile Premier League (MPL), B2B industrial goods marketplace Moglix, social commerce startup WMall, and fintech startup Wishfin, among others.
It has a portfolio of 70 firms, including six unicorns.
General Catalyst’s plans to double down on India come despite a broader slowdown in funding activity in India and Southeast Asia and a tough fundraising landscape.
Recently, Leo Capital closed its third fund way below its target corpus of $125 million as the Singapore-based venture capital firm struggled with investor reluctance amid a tough fundraising environment. Separately, Bahrain-based alternative asset manager Investcorp has also delayed its plan to scale up investments in India to $5 billion due to the sluggish pace of private equity investments in India and globally throughout 2023.
Other major investors like SoftBank, Tiger Global, Prosus, and Alpha Wave have either paused or reduced their investments in India. However, SoftBank is preparing to resume investments in Indian startups after an 18-month hiatus, according to MoneyControl.
