Japanese automotive major Suzuki has launched a venture investing arm — Next Bharat Ventures — with a corpus of INR 340 crore to back early-stage startups.
The vehicle will be set up as a subsidiary of Suzuki, which is the sole limited partner (LP) for the first fund, Vipul Nath Jindal, managing director and chief executive of Next Bharat Ventures told ET. LPs are sponsors in funds.
The vehicle will not be a typical corporate venture capital (CVC) arm but act like an independent unit of Suzuki, with the local team deciding on investments, said Jindal who was earlier the head of Suzuki’s innovation centre in Japan.
Next Bharat Ventures will make investments in firms through a residency programme, the first cohort of which will begin in October this year, with applications starting on Thursday. This will be similar to residency programmes run by the likes of Antler and Y Combinator but will focus on firms that will make a social impact through their businesses.
Based in GIFT City, Gujarat, Suzuki will likely run the residency programme in Bengaluru. “We don’t expect the participants to be in the city all the time… though the city provides the space and opportunity to learn and network, they are impact startup founders and will likely need to be on the ground a lot. We want to provide them that flexibility,” Jindal said.
It will aim to make up to 20 investments per year over the next three to four years. The cheque sizes will range from INR 1 crore to INR 8 crore.
“We are looking for for-profit firms whose work will also have a very clear social benefit… we’re looking to start off by investing in sectors like agritech, supply chain management, financial inclusion and rural mobility, among others,” he added.
The investments will have a horizon of 15 years, as opposed to the norm of 10+2 years. “This is a difficult sector to build a business in but we want to be the patient capital that these investors need,” Jindal said. The vehicle will focus on businesses that benefit workers in the informal economy, like gig workers and waste management workers, as well as those that work with the rural economy, involving farmers and artisans.
It will also act as a fund-of-funds (FoF), investing as an LP in other smaller funds.
