Kalaari Capital, a women-led venture capital firm, made about $600 million in 2021 alone after partially or completely exiting from roughly ten businesses.
Kalaari Capital's founder and managing director, Vani Kola, claimed, “we have had about 8-10 solid exits this year, some larger than the others. I think a couple of our funds have returned over 2X the capital raised, and still have significant portfolio holdings in them. I expect that most of our funds will offer somewhere between a 4X to 5X return in total distribution over time.”
Kalaari Capital launched a fund in 2011 that has since proven to be the firm's best performer in terms of returns. Another opportunity fund, founded in 2016, continues to give high returns to its clients, according to Kola. Reliance Industries is one of the VC Company's limited partners, and it is currently investing from its fourth fund.
According to Kola, about 40-45 percent of the investment has been allocated to date, and the VC company needs to provide follow-on funding to start-ups.
Kola's statements come at a time when Indian entrepreneurs have witnessed record financing from both international and domestic venture capital (VC) and private equity (PE) firms, in a year that has already created 42 unicorns, or privately-held companies valued at more than $1 billion.
This year, Kalaari Capital has spent $75-90 million in 22 acquisitions, making it one of India's most active private market investors.This year, the early-stage venture capital firm partially exited a number of its top portfolio businesses, including Dream11, Simplilearn, Shop101,and MilkBasket among others, resulting in strong returns for its investors.
To date, the venture capital firm's most notable achievement has been a partial exit from Dream11, a fantasy sports company owned by Dream Sports. Kola reported in a LinkedIn post dated 1 April 2021 that the VC had repaid up to $206 million to its LPs, but provided no other specifics.
Kalaari Capital launched its first investments in fintech, ecommerce, SaaS (software-as-a-service), and non-financial transactions (NFTs) this year (non-fungible tokens). Kola claims that the VC firm is still optimistic about these sectors.
Kola further said, “we invested in these deep-tech companies, because there’s this growing tsunami in the services industry, to the product industry, to emerging technologies and IP-based companies. These are things which we could not do for two to three years. I think largely put, all this is bringing this digital transformation, and social behavioral shift in India...it's representing that in a microcosm.”
According to Kola, Kalaari Capital will look into other sectors in the near future, in addition to well-known ones like retail and infrastructure, where the VC company has never entered before. Kola emphasised, “there are several things we don't invest in, such as traditional retail or infrastructure, because our focus is on tech-led innovation. In that sense, we will look at everything right now. We might believe in certain models or we might not when we actually meet them, but there is no sort of blacklist that I have.”
B2C (business-to-consumer), edtech and education, fintech, agritech, and food delivery will all be "sunrise themes" in the years ahead, according to Kola, even if the business models of certain organisations in these areas change.
Kola feels that a regulatory framework for crypto and blockchain technologies is urgently needed in India, and Kalaari Capital has invested in Guardianlink.io, an NFT platform. She explained, “many other countries have done that (regulatory framework), and I think it’s important, given the economic implications at many levels. By our estimate, (Indian) NFT companies this year alone have raised over $600 million in venture funding, but they're putting the company in Dubai or some other jurisdiction to be able to do that, because they can't do that here. I think we should enable that, and so I think we have to sort of create a thoughtful, regulatory clarity soon on allowing startups to build from here. We have a large blockchain developer group in India, which recently even Mark Zuckerberg and Mukesh Ambani spoke about.”
CXXO, a programme aimed at investing in women-owned businesses, was recently launched by the venture capital firm. The program's goal, according to the website, is to "...level the playing field for women founder-CEOs in building India's digital future by producing exponential value in the economy."Kalaari Capital has set aside $10 million for the initiative and has so far sponsored three companies: Samosa Party, kindlife, and Creative Galileo.
