The investment firm led by the Indian cofounder of technology services company UST is looking to raise about $1 billion to invest in startups and private equity opportunities in Asia’s third-largest economy and beyond.
McLaren Strategic Ventures has started preliminary roadshows and has seen good interest from family offices and Middle Eastern state investors, chairman Sajan Pillai, 54, told Bloomberg News in an interview in Mumbai. The firm aims to complete the fundraising by March and will target investments in banking and fintech, health tech and in supply-chain companies operating in the digital space, Pillai said.
Set up by Pillai in 2019 with funds from the sale of his stake in UST, then known as UST Global, MSV has invested $300 million to date, in areas including chip design and product engineering.
MSV also provides advisory services including preparing companies for initial public offerings in the US, where Pillai is based. He is also general partner of early-stage fund Season Two Ventures, which he said has invested in 20 companies in India and overseas. In addition to the US, MSV has a six-person office in Bengaluru and Pillai said they are weighing starting one in Mumbai.
He named MSV after the racing car brand and is a proud owner of a McLaren, though as its website notes, the firm has no affiliation with McLaren Automotive. UST was a Formula One race sponsor, he said, and described himself as “crazy” for McLaren cars due to their acceleration. Pillai wanted MSV to accelerate the opportunities for entrepreneurs, he said.
Last year MSV joined the blank-check craze, sponsoring McLaren Technology Acquisition Corp. which raised $201 million in an IPO in November. The special purpose acquisition company is seeking targets in banking, financial services and insurance that use technologies such as AI and machine learning, according to its prospectus.
Pillai is undeterred by the fate suffered by numerous firms created via mergers with SPACs, as US regulators weigh proposals to add protections for retail investors. Billionaire investor Bill Ackman said Tuesday his blank-check firm will return $4 billion to investors after failing to consummate a merger deal.
“The correction was inevitable, but SPAC as a strategy will continue to be a legitimate alternative for entrepreneurs to list their companies,” Pillai said. “It is a relative collapse but not absolute.” He is confident that the McLaren SPAC will complete a merger with a target by the first quarter of next year, and wants to launch two more of the vehicles by 2024 after the first one’s merger closes.
“Eight months ago, the interest was off the chart, but legitimate companies are still trying to list” via SPAC, Pillai said. Despite the regulatory changes, “SPAC is here to stay.”
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