Two Indian Startups Led VC March Capital to a Billion-Dollar Return

On Sep 10, 2021

March Capital is known for early bets on Southern California enterprise companies like CrowdStrike.
But it’s the firm’s Indian portfolio that has been producing the biggest returns lately.
Thanks to two Indian exits in the past month, the firm expects to return close to a billion dollars.

Santa Monica-based venture firm, March Capital, is best known for making early bets on Southern California enterprise companies like CrowdStrike, which started in Southern California’s Irvine before moving to Silicon Valley’s Sunnyvale.

But it is the firm’s small but mighty Indian portfolio – which makes up close to 15% of its more than billion dollars of capital under management – that has been producing its biggest returns lately.

Thanks to two major Indian exits in the past month, March expects to return close to a billion dollars across its various funds and direct co-investments based on roughly $100 million invested, according to Sumant Mandal, March’s co-founder and managing partner.

First, there was CarTrade, an Indian online auto classifieds platform, that went public August 20th.

March first invested in the company’s series C round four years ago and doubled down in the last round before the IPO to own a total of 10.3% of the company.

March sold about one-third of its stake in the IPO, which got off to a shaky start, but plans to hold onto the rest of its stake for the long haul.

“We think there’s upside so we’re in no hurry to sell,” Mandal said. “Indian online adoption of these new applications is just starting.”

Less than two weeks after CarTrade went public, another one of March’s Indian investments, BillDesk, on online payments provider, was acquired by Prosus for $4.7 billion.

Mandal first invested in BillDesk in 2006, buying 23% of the company for $5 million at the prior firm he still manages, Clearstone Venture Partners. When he formed March Capital in 2014, he kept buying more shares.

“Pretty much whichever fund that I’ve been a part of, I’ve invested in every one of their rounds,” Mandal said.

March amassed a 5.63% stake in the company and Mandal says March, Clearstone, and the firms’ limited partners will reap close to a 4x return once the deal closes.

Mandal says he thinks much of BillDesk’s growth is in front of it, so the company was not looking to sell.

“But it’s an incredible exit,” he said.

Mandal also thinks March’s best days in India are ahead of it. The firm recently added a Mumbai-based partner, Rajan Mehra, and Mandal says he is particularly bullish on India because he sees the country’s digitization just beginning and a slew of globally competitive Indian software companies sprouting up.

“Both of these trends are accelerating like I’ve never seen before,” Mandal said.

Unfortunately for Mandal, India is no secret and lots of other VCs are chasing deals there too.

Indian startups have already raised $17.2 billion so far this year, already considerably more than the $11.1 billion hauled in last year. SoftBank has been the most active investor, followed by Tiger Global, Temasek, Sequoia Capital and Prosus Ventures.

Mandal admits it is frustrating to be priced out of deals from the likes of Tiger and Softbank.

“It happens all the time,” Madal said. “We’ll think a company has a three or four hundred million dollar valuation and they raise money at a billion from another fund.”

But he says if March cannot compete on price, March differentiates itself in other ways.

“They invest passively,” Madal said.”They are willing to pay higher prices. They don’t take board seats. We have the opposite approach. We get involved in companies. Not everyone wants that but if they want it we provide a better fit than Tiger does.”

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