Booming Indian tech scene draws in Singapore VC set up by Pine Labs founder

LEO Capital, an early-stage venture firm co-established by the founder of fintech unicorn Pine Labs, is setting up a US$125 million fund next year to invest into Indian tech companies and startups.

This would be the third fund of the venture firm set up in 2017 by Indian entrepreneurs Rajul Garg and Shwetank Verma. Garg founded Pine Labs, which specialises in payments systems and was valued at US$3.5 billion in July. He also founded Indian IT firm GlobalLogic and business-education institute Sunstone. A prominent angel investor since 2011, he was an early backer of Indian social commerce giant, Meesho.

Verma specialised in healthcare and education investments under Clermont Group, and went on to lead innovation and startup partnerships at Metlife Asia. He also founded a startup, MyHealthMate, which was acquired in 2016.

Leo Capital has previously raised US$106 million for two funds centred on tech opportunities in India and South-east Asia. With its new fund, the firm seeks to focus on Indian startups specialising in sectors such as commerce, healthtech, logistics, edtech, fintech and insurtech. It is also eyeing Indian tech companies that serve a global market or are South-east Asia-centric.

The firm's plans come as tech investments and listings are booming in India. The country's startups received US$26.7 billion in the first three quarters of this year alone. This puts India on track for well more than US$35 billion in investment by the end of 2021, Leo Capital said. It expects some 100 unicorns in India by 2023, up from 66 at present.

Verma said: "There is abundance of opportunity in the startup ecosystem across India and South-east Asia, where a unicorn is born every week. India's maturing startup ecosystem has moved well beyond just consumer apps and there is a booming domestic stock market that has shown investors a path to liquidity that has not always been there.

"On the latter point, India's public market could grow to more than US$5 trillion, making it the fifth largest in the world, within three years. The country just recently passed the US$3.5 trillion threshold. There are 150 private companies waiting in the wings that could potentially list on the market within the next three years."

Garg said that he is looking for companies with a business model that can scale to "enduring, impactful" large enterprises. He added: "We can invest very early, at a concept stage, or we can invest a little later, depending on the space itself, traction, ability to scale and other factors."