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NEA’s Bala Deshpande to set up independent investment firm

LiveMint logoLiveMint 30-07-2017 Swaraj Singh Dhanjal

Bala Deshpande, India head of US venture capital fund NEA, is setting up an independent investment firm along with her three colleagues, said three people aware of the development.

NEA (New Enterprise Associates) is a California-based global venture capital firm.

The new firm—MegaDelta Capital Advisors—is seeking to raise around $250-300 million of capital for its first India-focused fund, said one of the persons cited above requesting anonymity as the talks are private. All three asked not to be identified.

Deshpande and her colleagues Ruchir Lahoty and Tarun Sharma are partners in the firm, filings with the registrar of companies show. Nikhil Marwaha, the fourth member, is the principal of the fund.

“The entire four-member team, which till recently was handling the NEA portfolio, has set up this new platform. They have initiated conversations with limited partners (LPs) for raising their fund. They are talking to the same LPs of NEA for the fundraising,” said the first person.

According to the second person cited above, Deshpande and the team will continue to manage the NEA India portfolio.

“They are managing the (NEA) portfolio and will continue to do so for some time. They are actively involved in exit processes and in follow-on investing in their portfolio firms,” he said.

Last month, NEA participated in a $12.3 million follow-on round in its portfolio firm MoneyTap, a fintech start-up. This follows NEA’s China team—which had managed investments in that country since 2005—striking out in 2016 to form the $125-million Long Hill Capital. NEA came in as an LP in the fund.

NEA and MegaDelta Capital are expected to continue to work closely going ahead, said the third person cited above, also requesting anonymity.

“Just like in the China case, NEA is supportive of the plan of its India team to set up their own platform. The two funds could look at co-investing going ahead. In fact, the China precedent was important in helping the Indian team make this decision,” he said.

Emails sent to Deshpande and NEA were not answered.

For its India entry in 2006, NEA had sponsored a fund NEA IndoUS Ventures in partnership with Vani Kola. In 2012, Kola left NEA to start Kalaari Capital.

Deshpande had joined NEA India in 2008 as senior managing director. She was previously associated with ICICI Ventures. With her own investment firm, Deshpande will join the ranks of PE and VC fund managers who have moved out of established firms to set up their own ventures, including former colleague Renuka Ramnath who quit ICICI Ventures to set up Multiples PE.

In 2015, Mahesh Parasuraman, who split from Carlyle, launched a growth capital fund of $150-200 million called Amicus capital with Sunil Theckath Vasudevan, former partner at India Value Fund Advisors (now True North).

Likewise, Gulpreet Kohli, after spending 14 years at ChrysCapital, quit to set up Mylen Capital.

Heramb R. Hajarnavis, who led the private equity practice for Kohlberg Kravis Roberts and Co (KKR) in India, has left to set up his own PE firm called Sea link capital partners.

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