How two Indian startups led the Santa Monica VC company March Capital to a billion-dollar return

Sumant Mandal is the co-founder and managing partner of March Capital.

  • March Capital is known for early betting on Southern California companies like CrowdStrike.
  • But it is the company’s Indian portfolio that has seen the greatest returns recently.
  • Thanks to two exits from India last month, the company expects a return of nearly a billion dollars.
  • Check out Insider’s business page for more stories.

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

But it’s the company’s small but powerful Indian portfolio, which accounts for nearly 15% of its more than $ 1 billion under management, that has seen its biggest returns recently.

According to Sumant Mandal, March’s co-founder and managing partner, March expects to see nearly $ 1 billion in its various funds and direct co-investments based on around $ 100 million in its various funds due to two large exits from India last month.

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

March first invested in the company’s Series C four years ago and doubled to a total of 10.3% of the company in the last round before going public.

March sold around a third of his stake in the initial public offering, but plans to keep the rest of his stake for the long term.

“We believe there are advantages, so we are in no rush to sell,” said Mandal. “Indian online adoption of these new applications is just beginning.”

Less than two weeks after CarTrade went public, another Indian investment in March, BillDesk, an 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 from the previous firm he still runs, Clearstone Venture Partners. When he founded March Capital in 2014, he kept buying more and more stocks.

“Pretty much no matter what fund I was in, I invested in every round of theirs,” said Mandal.

March has acquired a 5.63% stake in the company, and Mandal says March, Clearstone, and the companies’ limited partners will generate nearly four times that return after the deal is closed.

Mandal says he thinks a lot of BillDesk’s growth is in the foreground, so the company didn’t want to sell.

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

Mandal also believes that the best days of March in India are still ahead of him. The company recently added a Mumbai-based partner, Rajan Mehra, and Mandal says he is particularly optimistic about India because he sees the country’s digitization just beginning and a number of globally competitive Indian software companies emerging.

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

Unfortunately India is no secret to Mandal and many other VCs are hunting for business there too.

Indian startups have already raised $ 17.2 billion this year, significantly more than last year’s $ 11.1 billion. SoftBank was the most active investor, followed by Tiger Global, Temasek, Sequoia Capital and Prosus Ventures.

Mandal admits that being priced out by stores like Tiger and Softbank is frustrating.

“It happens all the time,” said Madal. “We’ll assume that a company has a valuation of three or four hundred million dollars and is raising a billion from another fund.”

But he says if March can’t keep up on price, then March is different in other ways.

“You invest passively,” said Madal. “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 we offer one more suitable than Tiger.”

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