General Catalyst, a prominent venture capital group based in Silicon Valley, is making significant strides in expanding its presence in India. The firm has partnered with local venture firm Venture Highway and has allocated a substantial sum of $500 million to $1 billion for investments in the country. This move comes as General Catalyst aims to tap into the vast potential of India’s burgeoning startup ecosystem.
Venture Highway, known for its investments in successful companies like Meesho and Moglix, will now collaborate with General Catalyst to implement a multi-stage investment strategy. This strategy will focus on early- and growth-stage startups across various industries in India. Neeraj Arora, Venture Highway’s founder, and Priya Mohan, its GP, expressed their excitement about joining forces with General Catalyst in an interview with TechCrunch.
Traditionally, Venture Highway has primarily focused on early-stage investments. However, as part of the General Catalyst team, the firm will expand its scope to include incubating startups. Mohan highlighted their vision of building companies that not only go public but also have a significant impact on the economy.
With over $25 billion in assets under management, General Catalyst plans to make substantial investments in India over the next three years. Arora, who played a pivotal role in WhatsApp’s sale to Meta, stated that the firm aims to invest between $500 million and $1 billion. This move positions General Catalyst as one of the largest venture capital firms in India, alongside other prominent players like Lightspeed, Accel, Elevation, and Nexus.
It’s important to note that General Catalyst is not acquiring Venture Highway’s portfolio. However, Venture Highway’s portfolio companies will still be considered part of General Catalyst’s portfolio moving forward. Hemant Taneja, General Catalyst’s CEO, emphasized their commitment to supporting these companies just as they would support any other company in their portfolio.
The collaboration between General Catalyst and Venture Highway has been in the works for several years, and the timing was finally right. Arora explained that they had the option to raise more capital but believed that joining hands with General Catalyst made the most sense given the current opportunities in India.
India has experienced remarkable economic growth over the past decade, with a GDP rate of 8.2% in the latest financial year. Favorable policy changes have attracted significant investments from global investors, including SoftBank, Tiger Global, Peak XV, Lightspeed, and Accel. However, the historical returns on capital in India have been less than satisfactory. This presents an opportunity for General Catalyst and other venture capital firms to leverage their expertise and make impactful investments in the Indian tech startup ecosystem.
General Catalyst already has an established presence in India, with investments in companies like CRED, Spinny, and Orange Health. The firm recently co-led a funding round with Tata for Alsym Energy, a company developing non-flammable rechargeable batteries. Taneja anticipates more partnerships with Indian conglomerates in the future, recognizing their entrepreneurial nature and their potential to contribute to India’s growth opportunities.
By teaming up with industry leaders and collaborating with governments and conglomerates, General Catalyst aims to transform industries and drive growth. This approach has been successful in healthcare in the US, where they actively work with healthcare systems and government entities. Taneja hinted at a similar approach in India, particularly in areas like policy and artificial intelligence.
In addition to its expansion in India, General Catalyst made a similar move in Europe last year by merging with Berlin-based venture firm La Famiglia. While there was no comment on whether they would replicate this model in other markets, General Catalyst is reportedly close to closing a $6 billion fund, indicating their commitment to further growth and investment opportunities worldwide.
