Facebook co-founder's VC firm eyes digital health tech and fintech

B Capital, the venture capital (VC) firm co-founded by Facebook co-founder Eduardo Luiz Saverin, is eyeing investment in areas such as enterprise technology, software-as-a-service (SaaS), digital health tech and fintech.

It is also looking to invest in logistics and supply chain, helping industries to scale up digitisation.

B Capital recently closed $250 million Ascent Fund II, its first dedicated early-stage fund. Ascent invests in pre-seed through series A rounds globally, with an emphasis on the US and Asia, including India.

With $6.5 billion in assets under management (AUM) across multiple funds, B Capital has backed Indian unicorns such as Byju’s, Meesho, BlackBuck and Dailyhunt.

“We are looking at health tech and digital health, which over the last 2-3 years have seen demand partly because of the pandemic,” said Karan Mohla, partner, B Capital.

“There is a realisation that the physical health care infrastructure is not able to necessarily keep up with the demand side. And, one would have to take a more digital approach to it.”

B Capital is also looking to invest in the business and consumer segments of financial technology (fintech) in India. The sector is already witnessing a lot of growth in terms of infrastructure and the end application.

“We still think there is much to be done, given how under-banked the population is and there is a low penetration of insurance,” said Mohla. He added, “There are also businesses that need to develop more structured forms of credit and lending to be able to grow.”

The firm is also looking to invest in enterprise tech companies, which are building SaaS models for the world in India. In August last year, B Capital backed business-to-business (B2B) sales productivity start-up Nektar.ai.

Experts say that India’s position as an attractive destination for PE/VC investments is expected to remain strong in 2022, given its high growth and macroeconomic and policy stability.

However, the continuing geopolitical tensions, rising inflation, strengthening dollar, quantitative tightening by the US Fed, crude oil price spikes and fears of a global recession remain key downside risks. These are making investors circumspect, said a recent report by consulting firm EY.

“At a macro level, there is a bit of uncertainty right now. But when we look at the India opportunity, especially the early stage (start-ups), we are still excited as there is a lot of innovation,” said Mohla.

He added, “But we have to tread with caution over the next few months to see the impact at the macro-level and then we would have a better idea and act accordingly. We are long-term investors and typically partner companies for seven-eight years, but you have to make sure that the current and near-term challenges are taken into account.”

In April 2021, Byju’s raised over $455 million from a slew of investors, including B Capital Group, Baron Funds and XN, as part of its massive $1 billion funding round. The move reportedly increased Byju’s valuation to $15 billion.

Last September, e-commerce start-up Meesho raised $570 million, led by Fidelity Management & Research Company and B Capital Group. Following the fundraise, Meesho’s valuation more than doubled to $4.9 billion in less than five months.