Consumer-focused private equity (PE) firm Lighthouse Funds on Tuesday said it has closed its third fund, Lighthouse India Fund III, at USD 230 million (Rs 1,600 crore), Mint reported. This takes Lighthouse Funds’ total assets under management to about USD 500 million.
Fund III will make investments anywhere between Rs 50-300 crore in high growth opportunities, it said in an official statement. It aims to assist companies with operational enhancement, marketing and sales optimisation, M&A and human capital enhancement.
Investors in Fund III include the International Finance Corp. (IFC), UK’s CDC Group and German investment group DEG, besides a number of large, global endowments, pension funds and family offices.
“We thank our existing investors, many of whom have backed our efforts for a decade plus, and we welcome our new investors into the family. Their support will allow us to continue to find and back great entrepreneurs building strong long-term businesses, encouraging them to dream, dare, scale and care,” said the partners of Lighthouse in a joint statement.
The third fund has already made four investments. In December 2018, Lighthouse acquired a minority stake in Aqualite for Rs 250 crore. In November, the fund had invested Rs 160 crore in Duroflex, a leading mattress brand. It infused Rs 83 crore into Tynor Orthotics, a manufacturer and exporter of orthopaedic and fracture aids.
Founded in 2006 by Sachin Bhartiya, Sean Sovak and Mukund Krishnaswami, Lighthouse is known to find and back some of India’s leading consumer brands. Its portfolio includes marquee consumer-centric brands such as Bikaji Foods; WOW! Momo; Kama Ayurveda; Cera Sanitaryware; FabIndia; and V2 Retail.
Although, most of its investment has been in consumer companies, late last year, it backed online beauty retailer Nykaa.
About its investment in Nykaa, Krishnaswami told The Passage, Nykaa is not really a consumer internet play. "It’s a consumer company selling cosmetics, a space we know well because of our investment in Kama Ayurveda."
"We are happy to back such growth businesses. Nykaa is using technology to reach a larger base of customers and deliver a customer experience. They are focused on growth, customer experience, brand building - no different than any consumer facing business in our portfolio," Krishnaswami said.
Mint had reported earlier that CDC Group, a development finance institution owned by the UK government, had invested USD 25 million in the fund. In December 2017, Lighthouse Funds had said that Fund III had received commitments of USD 20 million from IFC, the private investment arm of the World Bank group.
Lighthouse had raised USD 100 million for its first fund in 2009, followed by a USD 135 million second fund. It has invested in 17 companies since then.
Private equity (PE) and venture capital (VC) investments hit a record monthly high of USD 7 billion in March, growing more than twice compared to the same period last year, according to EY’s Private Equity Monthly Deal Tracker.