Gaja Capital is on the hunt for a refined version of the hungry but inexperienced startup founder—senior corporate leaders and professional managers struck by the entrepreneurial bug.
The mid-market private equity firm is actively scouting for seasoned professionals to build new ventures across consumer businesses, education, financial services, and enterprise software.
“We have a whole generation of professional managers who didn’t have entrepreneurial opportunities when they were in their twenties and thirties. More people are now becoming interested in entrepreneurship,” Gopal Jain, co-founder and managing partner at Gaja Capital, told Mint.
“It works both ways—sometimes we approach people, sometimes they approach us,” he added.
Last month, Gaja Capital and venture capital fund Lok Capital agreed to invest ₹800 crore in Weaver Services, an affordable housing finance startup founded earlier this year by former executives of mortgage lender HDFC Ltd.
The domestic private equity firm has made similar investments earlier. Gaja Capital first invested in RBL Bank Ltd in 2010, when the private sector lender was led by former Bank of America managing director and chief executive Vishwavir Ahuja. Gaja Capital has since diluted its stake in RBL.
“The starting point is a space and a management team,” said Jain. “For it to become a reality, we need to find something worth buying—an asset through which we can address the potential in the market. Additionally, we need to ensure that we can buy it at the right price.”
Jain is clear on what he is looking for in potential entrepreneurs to build businesses alongside the private equity firm.
Professionals should be specialists in domains with a large addressable market and have successfully managed and scaled businesses. “It is essential for such professionals to have the ability to source transactions. Some people claim to be vertical specialists but fail to identify viable targets,” Jain added.
He is also looking for leaders who can build a core team to work with them on a new venture. “If someone cannot attract people to work with them, it may indicate they are not effective at managing people,” Jain said.
While Gaja’s cheque would come in later, its involvement would start much earlier, from refining the idea, identifying potential transactions, and negotiating the deal. Currently, along with conversations with professionals, Gaja is also looking to buy early-stage companies and accelerate their growth.
“It’s more capital efficient because if you are willing to buy a small asset, you have more purchasing power than if you were going after an asset that 100 investors want to buy…,” said Jain.
According to Aakash Choubey, partner at law firm Khaitan & Co., private equity firms typically retain majority control of a company in such transactions. While management teams benefit from equity and other incentives, these can be subject to restrictions, he said. “These conditions can limit the management’s ability to sell shares, exercise full control, or explore other opportunities,” Choubey added.
Founded in 2004, Mumbai-based Gaja Capital prefers to invest through buyouts and growth capital. It raised over $800 million across four funds, closing its latest fund at $400 million in 2023, according to media reports.
Gaja Capital has cumulative assets under management of $1 billion across four funds, including co-investments.
Jain declined to comment on an Economic Times report earlier this month that said Gaja Capital was contemplating an initial public offering and had appointed IIFL Securities to manage the issue.
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