Draper Fisher plans $150mn India-specific fund

To invest Rs 10 crore in online movie rental firm

Draper Fisher Jurvetson (DFJ), a global venture capital firm with $3 billion in capital commitments, plans to raise a $150 million India-specific fund.

Draper, which shot into limelight for its early investment in Hotmail, is expected to have the fund ready by the end of this calendar. Draper will also set up its own office in India to manage the fund.

DFJ managing directorRaj Atluru said they were in advanced negotiations with a variety of global financing institutions to raise the fund and the $150 million India fund in all probability would be tied up much before the December timeline.

"The fund will specifically look at companies across a range of sectors and will target the Indian market. The wireless space, the internet market are starting to rev up here and this is an opportunity, which we will look out for," Atluru said.

DFJ is currently drawing down from its $400 million global fund, which has been in existence for one year, and there has been a handful of investments in India from the fund. Besides Hotmail, over the past 20 years, DFJ has backed approximately 300 companies across a myriad of sectors including industry-changing catalysts like Baidu, Skype and Parametric.

DFJ on Thursday also announced an investment of Rs 10 crore in an online movie rental firm, Seventymm, founded by Raghav Kher. Kher was earlier with Microsoft and had played a crucial role in Microsoft acquiring Hotmail.

Seventymm, initially based out of Bangalore, will have close to 10,000 movie titles across a variety of languages and any consumer registered with the portal, can request a listed CD/DVD online, which will be delivered to one's home and will also be picked up later after a request.

Consumers have to pay a deposit of Rs 2,000 and then opt for a monthly rental plan of either Rs 199 or Rs 549 through which they will be able to hire four movies or unlimited titles respectively.

Atluru added that they were open to investing a further Rs 50 crore in the firm depending on the growth of the business. For the record, Kher said they were targeting three lakh subscribers in a couple of years and hoped to see revenues of Rs 200 crore by that time. The growth will be backed by Seventymm expanding into other cities like Mumbai, Pune, Hyderabad and Chennai.

Atluru added, "The Indian entertainment market is worth Rs 25,000 crore and Seventymm is pioneering a new category in home entertainment. We are delighted to back the company and are confident of its success."