Middle East’s Hades Financial eyes deeptech, SaaS investments in India

   2024-06-02 18:06

Bengaluru: Riyadh-based investment management firm and limited partner Hades Financial Private Capital Group, which announced $28 million investments in two Indian investment firms on Monday, plans to invest $500 million in the country by 2027, a top official said.

The move indicates Hades Financial’s increasing focus on India as an emerging market, expecting a rise in investment opportunities backed by a rapidly growing economy and influx of foreign capital.

Currently, India represents 15-18% of its global assets under management (AUM) and the firm plans to gradually increase the share. To date, the company manages over $4.6 billion in assets globally and is backed by some of the world’s largest sovereign wealth funds.

The global investment manager, which was founded in 2011, is also looking to make crucial investments in deeptech and software-as-a-service (SaaS) companies in India, Vasu Chaturvedi, investments associate at Hades Financial, told Mint.

“We’re very bullish on India’s growth story. One of the biggest advancements I have seen is that infrastructure is improving and the economy is growing robust which has led to the emergence of innovative companies, especially in deeptech,” Chaturvedi said.

Hades—which is sector-agnostic—invests directly in companies and indirectly through fund managers. The Saudi Arabia-headquartered firm is also eyeing a few bets in SaaS through investments in fund managers focusing on the sector, as well as private equity firms focused on scaling up institutions in the infrastructure and automobiles sectors, Chaturvedi added.

Financial Ventures

The $28 million capital infusion is part of Hades Financial’s bigger aim to capitalize on emerging opportunities in the Indian landscape. Since 2016, Hades Financial has deployed over $150 million in the region across sectors including healthcare and financial services among others.

Hades Financial has invested in Somerset Indus Capital Partners and Cedar IBSi. Somerset Indus Capital Partners is a healthcare-focused private equity firm that has backed nearly 14 companies including Apex Hospitals and Emil Pharmaceuticals and has raised more than $100 million till date. Cedar IBSi is a strategy consulting and research firm focused on the financial services sector.

Somerset has been successful in identifying areas in the country, particularly tier 2 and tier 3 cities, that lack strong healthcare infrastructure, according to Chaturvedi, helping Hades Financial pick a long-term bet. Cedar, similarly, helps the firm go deeper into India’s banking industry.

Underserved Sector

Over the last five years, the deeptech sector in India has been mostly underserved. A large portion of global investors continue to look at sectors that have a larger story playing out like fintech, food, and consumer.

“Deeptech is an area that requires more strategic focus and hence may not be under the purview of a lot of investors. Currently, only 10-15% of limited partners are looking closely at the sector,” Chaturvedi noted.

Hades Financial believes companies that use deep technologies in areas like banking, healthcare and hardware, try to address small-scale innovation and with a gestation period of 5-6 years, have immense potential, according to Chaturvedi. 

Across global markets, it is observed that established companies tend to absorb a large part of the capital available which makes it difficult for emerging firms to gain access to funding, according to Chaturvedi. However, investors have now taken note and are actively looking at underserved segments, he added.

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Published: 03 Jun 2024, 06:30 AM IST

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