India in privileged position, poised for growth over 20 years: Niren Shah

In India, the company has 27 active investments including in Swiggy, NSE India, Duroflex, Finova Capital, Kishlay Foods, Mintifi, Quikr among others

Norwest Venture Partners, a global venture capital and growth equity investment firm, closed its $3 billion fund on Thursday. The firm will deploy the fund across three markets: US, India, and Israel. With the new fund closure, the firm’s total capital under management rose to $15.5 billion. The new fund would enable the Norwest team to continue partnering entrepreneurs in India and building the next generation of companies. In India, the company has 27 active investments, including Swiggy, NSE India, Duroflex, Finova Capital, Kishlay Foods, Mintifi, and Quikr, among others. Of these, 20 are profitable companies. In a video interview, NIREN SHAH, managing director and head of Norwest India, speaks to Dev Chatterjee on the firm’s plans for India. Excerpts:

What portion of this new fund will be deployed in India, US, and Israel?
 

We don’t have a specific allocation for India, and perhaps the best deal will win from the three geographies. However, we have invested $250-300 million annually in India over the past three years and plan to continue in the same range. So far, we have invested in 700 companies worldwide, with 27 being active investments in India. We have always focused on long-term investments. We believe India is coming of age, and in the next 20 years, we will witness a strong period for India. Sectors like healthcare, manufacturing, and finance show promise. The quality of founders in India is very high, and we expect a robust growth trajectory. We intend to remain part of this growth story.

What has been your most profitable investment in India so far?
 

We have made several profitable investments in India. For instance, we invested in Swiggy at a valuation of $30 million, and today it is valued at $9-10 billion. OfBusiness, a technology platform, which we invested in at a valuation of $200 million, is now valued at $5 billion. Five Star Finance has also performed exceptionally well. Our approach is not merely investing in companies but committing to long-term partnerships.

Which sectors are you bullish on in India and why?
 

We have made major investments in technology, financial services, and consumer sectors. We see immense potential in financial services, considering it’s a $38 trillion market in the US, whereas in India, it’s only $2 trillion. Additionally, we are exploring opportunities in health care, such as Thyrocare and Regency Hospitals, a North-based hospital chain. We are keen on companies that would benefit from a China Plus One strategy and are also looking into electric vehicle ecosystems. It appears multiple themes are concurrently driving growth in India. With the rise in gross domestic product per capita, consumer demand is increasing. New companies are emerging, and payment companies are thriving. After the pandemic, the offline consumer sector is also witnessing growth. We are focused on profitable companies with high governance standards. We conduct thorough due diligence before finalising any deals. We have taken six companies public, and recently Swiggy filed for an initial public offering. As a long-term fund with patient capital, we believe this sets us apart in the market.

What’s your view on the Indian economy compared to the US and Israel — the focus of this fund?
 

All three economies are doing quite well. Israel, in particular, has produced remarkable venture companies, with many becoming decacorns. India is in a privileged position, poised for growth over the next 20 years. Therefore, we are bullish on India.