Shifting Landscape: Why Venture Capital Firms in India Are Seeing Key Exits?

venture capital in India

The world of venture capital in India is undergoing a significant transformation. Over the past few weeks, there have been noticeable departures of fund managers and partners from prominent VC firms. This shift is akin to the changes witnessed in the startup world, including consolidation, founder departures, and second-time entrepreneurs launching new ventures.

Why are fund managers and key partners leaving their positions to explore new opportunities? 

The Investment Slowdown: 

One of the primary reasons behind this trend is the slowdown in investments over the past two years. The challenges faced by various portfolio companies have created a complex situation for VCs and fund managers. These headwinds have forced a reshuffling of personnel, impacting even marquee firms in Silicon Valley and beyond. High-profile departures from firms such as Sequoia and Tiger Global serve as examples. In India, this trend has become more evident. 

For instance, Orios Venture Partners recently witnessed the exit of managing partners Anup Jain and Rajeev Suri, who decided to explore new opportunities. Similar changes are occurring at other VC firms as well. Rebright Partners’ general partner Brij Bhasin left to start a new startup, while Lightbox Ventures is undergoing a significant shift at the top, with partners Siddharth Talwar, Prashant Mehta, and Jeremy Wenokur leaving the firm. 

Shifting Focus Areas: 

Another reason for these high-profile departures is the pursuit of newer focus areas or funds catering to niche sectors. Fund managers are constantly seeking opportunities to broaden their horizons and invest in areas that align with their expertise and interests. For example, Dhruv Kapoor moved from Sistema Asia Capital to Anicut Capital, and Tej Kapoor joined IvyCap Ventures from Fosun. 

Limited Partner Influence: 

Limited partners (LPs) play a crucial role in a venture capital firm’s operation. They are not only interested in the portfolio bets made by fund managers but also in how fund managers attract capital for fundraises from their LP base. In some cases, LPs have a strong affinity for particular fund managers and their strategies, which can influence the dynamics within a VC firm. 

In summary, the departure of fund managers and partners from VC firms in India can be attributed to a combination of factors. The investment slowdown and the challenges faced by portfolio companies have prompted a reevaluation of personnel. Additionally, the pursuit of new focus areas and the influence of LPs are also contributing to these changes. This evolving landscape reflects the dynamic nature of the venture capital industry and the adaptability of professionals within it. As the VC ecosystem continues to evolve, we can expect more developments and new opportunities on the horizon.