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    Scoop: Jio Platforms set to invest $200 million in Kalaari Capital

    Synopsis

    Jio Platforms’ investment in Vani Kola’s Kalaari Capital will give Reliance Industries an early line of sight into startups and upcoming sectors.

    ETtech
    Reliance Industries has closed a $100-million fund infusion into Kalaari Capital, with an additional commitment of $100 million slated for later. (Illustration: Rahul Awasthi/ETtech)
    Mumbai | Bengaluru: Jio Platforms is finalising an investment of up to $200 million in domestic venture capital fund Kalaari Capital, according to two people in the know of the matter.

    The Mukesh Ambani-led conglomerate has closed a $100-million infusion, with an additional commitment of $100 million slated for later, said another person aware of the group's plans to deepen its footprint in India’s burgeoning technology sector.

    “Kalaari Capital has communicated to multiple venture funds about racking up $100 million from Reliance, with the rest of the capital…to come in over the next year,” said one of the persons cited above, who did not want to be identified as the talks are private.

    Vani Kola-led Kalaari Capital will look to raise the second tranche over the next 12-18 months from either Reliance or external sponsors, a source privy to the development told ET. The venture capital firm gained prominence in the past decade by backing a string of e-commerce startups—including Snapdeal, Urban Ladder and Myntra—as well as unicorns such as online gaming platform Dream11.

    With Reliance backing Kalaari as its anchor investor or limited partner, the deal will emerge as one of the largest commitments by an Indian conglomerate in a venture capital firm.

    In an emailed response to ET, a Reliance spokesperson said, “Reliance remains committed to supporting the build-up of a thriving startup ecosystem in India, particularly in digital enablement space, and will continue to explore various avenues to do so.”

    Kalaari Capital did not respond to ET’s query till press time on Monday.

    Bengaluru-based Kalaari has been in the market to raise its fourth fund for over a few years. In January 2019, Kola told ET in an interview that the fund was targeting $200 million, but there was no subsequent announcement on fund closure.

    Notably, the VC firm had last raised a fund in 2015, when it mopped up $290 million—its largest corpus—in the backdrop of a funding frenzy in the Indian startup ecosystem.

    Reliance’s backing comes after some of Kalaari’s portfolio companies—including furniture retailer Urban Ladder and lingerie retailer Zivame—were acquired by units of Reliance Industries.

    Reliance-AcquisitionsETtech

    Eye on the future

    “Reliance’s investment in Kalaari will give the company an early line of sight into startups and upcoming sectors,” said one person aware of the deal. “RIL won’t necessarily acquire all the companies in which Kalaari invests, but it will certainly act as a discovery pipeline.”

    Reliance will use a two-pronged approach to take over companies that fill gaps in its capabilities, while keeping an eye on potential areas of future growth through Kalaari, said another person, requesting anonymity.

    Startup entrepreneurs are of the view that it is not a secret that Kalaari has grown close to Reliance Industries in recent years. “I don’t think entrepreneurs will perceive RIL’s backing as a bad thing, but Vani does have a troubled history with some of the founders of her portfolio companies, which may be an issue,” said one entrepreneur on the condition of anonymity.

    Vani Kola

    A veteran investor, Kola is known for spotting startups operating in the consumer internet space, but for the past few years, has battled top-level churn as well as disagreements and fallouts with portfolio firms and founders.

    ET reported in January that Kalaari’s stake sale in hyperlocal grocery provider MilkBasket to Mahendra Nahata’s MN Televentures had foiled the startup’s plan to raise capital or explore an acquisition by any suitor apart from Reliance. Nahata is known to be an associate of Ambani and Reliance.

    Kalaari, in its original avatar, was set up in 2006 when technology entrepreneur Kola, former Intel Corp Vice President Vinod Dham and former Intel executive Kumar Shiralagi launched a $190-million India fund backed by Silicon Valley venture capital firm New Enterprise Associates (NEA).

    At the time, it was called NEA IndoUS Venture Partners, which became IndoUS Venture Partners when NEA decided to go solo in India after a few years. However, the final reordering happened in 2012, with Dham leaving and the fund being renamed Kalaari.
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    3 Comments on this Story

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