DST Global (earlier called Digital Sky Technologies), an investment major which has backed companies like Facebook and Groupon, has started to look at Internet companies in India for potential deals, according to sources familiar with the development. DST Global, which has poured billions in Internet and social networking companies over the last three years, has also held preliminary discussions with companies like Flipkart and JustDial for investments, said the sources.
DST Global invests in late-stage, high-growth private companies in the Internet industry and has backed companies like Facebook, Zynga and Groupon over the last three years. And recently, it has also added microblogging site Twitter to its portfolio, leading a $400 million round at a reported $8 billion valuation.
DST Global's interest in India comes as it opened its Asia office in Hong Kong earlier this year. It has also invested in Chinese companies such as e-commerce player 360buy and Internet giant Alibaba Group.
One source familiar with DST Global's moves in India said that it offered to invest $100 million in Mumbai-based local search player Just Dial, although this could not be independently confirmed.
Incidentally, Just Dial filed for its IPO in June this year and is backed by investors like SAIF Partners, Tiger Global Management and Sequoia Capital India.
DST has also held discussions for investment in online retailer Flipkart, which is looking to raise $150 million-$200 million. The firm is reportedly eyeing a valuation of around $1 billion and is in talks with private equity majors like General Atlantic Partners.
Flipkart is backed by investors Tiger Global and Accel Partners, from whom it has raised $31 million across three rounds of funding.
However, the implications of these discussions could not be ascertained immediately. An e-mail query sent to DST Global regarding its interests in Indian Internet firms did not elicit any response at the time of filing this article. "We would not like to comment on any speculation regarding our funding," said a Flipkart spokesperson in an emailed statement. Just Dial spokesperson could not be immediately contacted.
According to a New York Times article in September, DST Global's office in Hong Kong has the single largest team with four investment professionals, led by John Lindfors. It has also added that DST is looking at opportunities across Asia and expects to spend 40 per cent of its capital in the region over the next five years.
Tiger Global, Accel Connection Incidentally, Tiger Global is an investor in DST Global founder Yuri Milner's Mail.ru Group. Besides, DST has been also involved in several co-investments with both Tiger and Accel Partners. While Tiger has invested in Flipkart and JustDial, Accel has backed the former. DST and Accel have also invested in companies such as Facebook, Groupon and Spotify.
Mail.ru, which comprises Russian operations of the group, got listed on the London Stock Exchange earlier this year to become Europe's biggest listed Internet firm. Milner is the non-executive chairman of the Mail.ru Group. The Mail.ru websites provide services like e-mail, social networking and gaming besides catering to e-commerce services like travel, e-tailing and real estate, among others.
Shareholders of Mail.ru include Tiger Global Management, South Africa-based media company Naspers and Chinese Internet giant Tencent, among others.
To know more about DST and Mail.ru, please click here.