LC Nueva Investment Announces INR 250 Crore Venture Capital Fund

Nitin Konde

09 Oct 2024 — 2 min read

LC Nueva Investment Announces INR 250 Crore Venture Capital Fund

A new venture capital fund with a target size of INR 250 crore has been established by LC Nueva Investment Partners, a collaboration between Lighthouse Canton in Singapore and Nueva Capital in Delhi.

With a greenshoe option of INR 100 crore, the new LC Nueva Momentum Fund would aim to reach a target size of INR 150 crore. The VC fund will concentrate on making investments in ten to fifteen businesses that are in the Series A and B funding stages. This collaboration created the LC Nueva Fund in 2023, with an INR 350 crore size cap. An official statement claims that since its completion, the fund has had impressive results, with more than half of the companies obtaining additional funding rounds and having an average revenue growth rate of almost 57%.

As of June 30, 2024, Lighthouse Canton, a global asset and wealth management company, was managing assets worth over $3.7 billion. Ashish and Sohil Chand launched Nueva Capital, an investment holding company that oversees $100 million in both the public and private markets.

What is the Greenshoe Option?

During initial public offerings (IPOs), corporations employ the greenshoe option, sometimes called the over-allotment option, to keep the stock price stable in case there is increased demand for their shares after the IPO. In the event of excess demand, it gives the underwriters, who help with the initial public offering (IPO), the authority to issue more shares—usually up to 15% of the initial shares issued. In addition to keeping the share price from soaring, the greenshoe option gives underwriters the chance to repurchase shares at the offer price, which helps stabilize the stock price.

New Focus Areas

The LC Nueva Momentum Fund will now concentrate on three main areas: secondary market investing, neighboring prospects, and reinvesting in already profitable portfolio companies.

"We are well-positioned to successfully navigate the current market dynamics by aggressively chasing secondary opportunities and utilizing the solid connections made through our prior fund," said Sohil Chand, the founding partner and CIO of LC Nueva Fund. The venture capital business claims that the secondary market in India has grown significantly due to a pressing demand for liquidity and falling valuations.

Sanket Sinha, Global Head of Asset Management at Lighthouse Canton, stated that secondary funds grew at the quickest rate of any asset class globally in 2023.

Portfolio secondaries, in which funds buy out entire General Partner portfolios, have significantly increased in India in recent years. These transactions used to be rare, but as businesses get older, institutional secondary investors are increasingly buying private secondary portfolios. He further explained that in the first half of 2024 alone, secondary share sales accounted for 34% of transactions in the $50–500 million area for big deals.