Private credit might be less attractive than it was last year as investors rush into the market, but there are sweet spots to be found.
Matrix Partners was founded by Paul Ferri. Ferri started his first firm, Hellman Ferri, in 1977 with a partner, Hellman then five years later around the time Hellman left, the firm was renamed Matrix. The current focus on technology and early stage investing was intensified from 1990 onwards. Matrix currently invests in companies in software, communications equipment, semiconductors, storage, internet and wireless with offices in Boston and the Silicon Valley. It invests $10 million or more over multiple rounds, with an initial investment ranging from seed amounts of $100,000-$300,000 to early-stage rounds of up to $10 million.
Matrix Partners India was then started in 2006 by Avnish Bajaj and Rishi Navani in partnership with Matrix Partners, USA. In India the focus will be on consumer services businesses including the internet, mobile, financial services, media, entertainment, healthcare and travel. For larger investment opportunities Matrix India will invest in partnership with the US parent and Matrix Capital, a U.S. hedge fund.
Both Bajaj and Navani bring experience from both industry and the financial services sector. Bajaj was a co-founder, and CEO of one of India's largest online shopping sites, Baazee.com which was acquired by eBay for an estimated $50 milion in 2004. Bajaj worked with Goldman Sachs, McKinsey and Apple Computer before he started Baazee.com. Navani joined Matrix from Sequoia Capital India (formerly WestBridge Capital Partners) where he worked from 2001 onwards. Navani has also worked at Apax Partners, Indocean Ventures (an affiliate of Soros Fund Management) and JP Morgan.
Venture capital investing is much newer in India than the western world. From the mid-nineties onwards there has been a concerted effort at various levels to tap into this pool of capital and the stock market regulator, SEBI has announced various guidelines to attract venture capital funds into the country. There is a feeling now that conditions are finally conducive for venture capital investing in India. Matrix India is one among a number of venture capitalists û including one of the most well known names in the industry, Sun Microsystems co-founder, Vinod Khosla - who believe the time is ripe to tap into this opportunity.
Prabhat Agarwal, founder and CEO of Parsec Technologies, a leading player in the contact centre industry welcomed investors like Matrix setting up shop in the country. Parsec raised more then $1 million of venture capital from Gujarat Venture Finance in the late nineties and Agarwal comments ôwhat Indian entrepreneurs need is more early stage investing from venture capitalists willing to back strong ideas and execution capabilities. Most of the activity thus far has been in the private equity space; going forward I am hopeful this will change and venture capital will gain momentum.ö
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Hesitancy aside, institutional investors eye Australia and Japan as promising geographies for private debt investments within Asia Pacific, with Greater China and Korea on the periphery.
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