Winning in India's Venture Capital Market

☕🗞️ Good morning! Welcome to The Brief

Every week, the team at Lightbox cuts through the noise and serves up sharp insights on key developments in India’s consumer economy. This week we unpack our learnings from the venture investing playbooks of Info Edge and Prosus; FMCG’s continuing battle with the consumption slowdown; and the most interesting deals from the consumer space.

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📡 Signals

Info Edge, Prosus and Decoding VC Playbooks in India

Early last week, Info Edge and Prosus – two of the most prolific non-traditional venture capital investors in the Indian market – signaled renewed investment momentum via their respective shareholder updates. As India’s startup ecosystem shows early signs of recovery from a downturn, the two-decade track records of these two consumer internet conglomerates offer a strategic lens into what it takes to deploy capital in one of the world’s most complex venture markets.

Read: Info Edge Letter to Shareholders, May 6

Read: Prosus CEO Letter, May 8

As a builder of India’s consumer internet economy, homegrown Info Edge operates at the early stages of the venture capital spectrum casting its net wide across companies and market segments. This has translated into nearly Rs 4,000 crore deployed across a portfolio of 111 companies, notable among which are Zomato (foodtech), Policybazaar (fintech), Bluestone (ecommerce), Shiprocket (logistics) and Ixigo (online travel).

Netherlands based Prosus prefers to invest in relatively mature, growth stage businesses that are aligned or have the potential to align with its global investment strategy. It has deployed $8.6 billion here so far across 30-odd companies including Swiggy (foodtech), Meesho (ecommerce), Urban Company (home services) and Rapido (mobility).

Both investors have had their share of problems and successes. On the latter, Prosus earned more than $500 million when it sold a part of its stake in the Swiggy IPO late last year and its remaining 25% stake was valued at $2.8 billion at the time. It’s other major exit event was the sale of parent Naspers’ 11.18% stake in Flipkart for $2.2 billion when Walmart acquired the e-commerce company. Info Edge’s stake in Zomato and Policybazaar – its two breakout investments so far – was worth a combined Rs 31,500 crore ($3.7 billion) as on March 2025 and the fair market value of its entire invested capital was pegged at Rs 36,855 crore (over $4 billion) generating an estimated 36% gross internal rate of return.

For traditional venture capital investors such as Lightbox, the growing presence of deep-pocketed and operationally strong non-traditional actors serves to strengthen the narrative for India as a viable venture capital market over the long term. While investment approaches will vary, a few universal learnings are applicable across playbooks in the ecosystem.

1. A long-term, patient approach wins: India’s consumer markets are defined by inefficiency at scale. The role of technology here is to drive efficiency, organise unorganised markets. But this takes time because of factors such as the sheer scale of the markets and problems on the ground. Therefore, investors should be prepared to hold positions for years, often much beyond the conventional 10-year fund lifecycle, to generate the most rewarding exits (IPOs such as Swiggy and Policybazaar or acquisitions like Flipkart).

2. The era of chasing growth at any cost has ended: In 2024, a record number of PE/VC-backed companies went public, creating long-awaited liquidity for investors. This happened on the back of many of those companies focusing on unit economics and profitability rather than growth at any cost. India’s M&A markets still aren’t deep enough to generate the return multiples required on the capital invested so far. Whether to attract later stage capital or take companies public, businesses models that pursue growth sans a clear path to profitability are no longer kosher.

3. The invest-and-build approach: An important component of Info Edge’s and Prosus’ investing playbooks is their ability to leverage their domain and operating expertise to steer their portfolio companies. As a venture capital firm that works on the principle of deep operational engagement, we plug that gap by bringing in operating partners who can work alongside our portfolio founders and help them build.  

4. Governance is non-negotiable: Both the Prosus and Info Edge shareholders letters highlight governance. Info Edge explicitly ties good governance to higher valuations and Prosus’s experience with Byju’s is a cautionary tale of governance neglect. Investors will have to take a proactive role in improving governance at portfolio companies. At Lightbox, we’ve developed and rolled out an intuitive governance framework for our portfolio companies and the impact will soon be evident. Companies with strong governance will not only avoid catastrophic failures but also earn investor trust and command premium valuations.

📰 News

FMCG Slows Down; Porter Joins Unicorn Club

Slowing Consumer Demand in Focus – Dabur’s Earnings

The domestic consumption slowdown continues to impact the FMCG sector. Last week, homegrown FMCG company Dabur India reported a 8.3% decline in net profits year-on-year for Q4 FY25 while revenues were flat.

During the company’s earnings call, CEO Mohit Malhotra attributed the decline to subdued domestic demand even as the international business remained strong. Malhotra also said that future growth areas for FY26 include getting out of non-performing categories (baby and adult diapers, Vedic tea), moving towards premiumisation and M&A led expansion into new age healthcare, premium personal care and wellness foods.

According to market analysts, consumer-focused businesses in general are likely looking at least a couple more quarters of slower growth. The ongoing geopolitical tensions in the sub-continent, coupled with US-led global tariff wars could extend the consumption slowdown.

Swiggy Exits Private Label Restaurants Business

Shortly after Zomato shut down quick food delivery offerings Quick and Everyday to refocus on its core business, rival Swiggy is doing the same with its digital-first restaurant brands. It has entered into a licensing agreement with cloud kitchen/ internet restaurants company Kouzina Food Tech for its digital-first food brands including the Bowl Company and Homely. Kouzina will manage end-to-end operations and growth for these brands and is expected to eventually acquire the brands.

Kouzina competes with Rebel Foods and currently has a network of 250 kitchen partners (franchisees run the kitchens while Kouzina controls the food and brand experience) that serve over 100 cities. It has 11 brands including KaatiZone, Warm Oven and Slurpy Shakes.

General Catalyst, Others Back PB Fintech’s Healthcare Arm

PB Healthcare Services, an arm of PB Fintech (Policybazaar), has raised $218 million as seed capital from a group of investors including General Catalyst. The round values the company, incorporated in January this year, at $243 million. PB Fintech is investing $62 million for a 26% stake while General Catalyst is investing $50 million for a 20.57% stake.

The company is setting up a 1000-bed hospital network in the Delhi-NCR region. The new venture is aimed at delivering a streamlined, cashless care experience to insured patients.

Porter Turns Unicorn in Kedaara Capital Backed Round

Hyperlocal logistics company Porter has raised $200 million in a new funding round from Kedaara Capital and Wellington Management. According to reports, $120-150 million is secondary capital, creating exits for Peak XV and Kae Capital. The round values Porter at $1.2 billion, taking the company into the unicorn club.

Porter has recently started ramping up its presence in third-party logistics for the booming quick commerce space with investments in two-wheeler fleets.

Routematic Raises Series C Round

Routematic, an corporate employee commute solutions provider backed by Blume Ventures and Bosch, has raised $40 million in a Series C round from Fullerton Carbon Action Fund and Shift4Good. The company is now valued at $110 million.

The company, whose offerings overlap with Lightbox-backed Cityflo, provides daily commute and shift-based transportation solutions (mostly cars and some buses) and also offers corporates parking and travel desk solutions through its proprietary software platform. It currently operates in over 23 cities and has 300 corporate clients and 300,000 monthly users. It aims to convert 30% of its fleet to EVs but hasn't specified a timeframe.

Lahori Zeera Maker Archian Foods Raises Rs 200 crore

Archian Foods, a Chandigarh based company best known for non-alchoholic beverage brand Lahori Zeera, is raising Rs 200 crore ($23.6 million) from Motilal Oswal Wealth, which is acquiring a 7% stake. The round values the eight year-old company at $331 million, up 3x from its 2022 valuation when it raised $15 million from Verlinvest.

Archian Foods has a production capacity of 5 million bottles per day, two manufacturing units in Punjab and Gujarat and 95% of its revenue come from offline sales. In FY24, it reported operating revenues at Rs 312 crore and net profits at Rs 22 crore. A 160 ml Lahori Zeera bottle retails at Rs 10.

Good Bug Raises Series B Round

The Good Bug has raised Rs 100 crore ($12 million) in a Series B round led by Susquehanna Asia Venture Capital. Fireside Ventures was a returning investor in the round. This brings the total capital raised by the startup to $20 million. 

The startup recently introduced Metabolically Lean, a GLP-1-based formulation as a natural, non-invasive alternative to weight-loss drugs like Ozempic and Mounjaro. The capital raised will be used for clinical trials, microbiome science and bacterial research, and marketing" co-founder Keshav Biyani said.

Bessemer Leads Series C Round in Vetic

Pet care startup Vetic is raising $26 million in a Series C round led by Bessemer Venture Partners at a post-money valuation of $113 million. The company offers consultations, telehealth, vaccinations, surgeries, physiotherapy, and grooming.

The space has seen a flurry of deals in the 12-18 months. Peak XV backed Heads Up For Tails, the largest player in the category, is currently in the market for a $40 million round (last raised capital three years ago). Super Tails, a later entrant, raised $15 million round last year.

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