A royal family’s billion-dollar bet on Indian startups—without a winner

**Snigdha Sharma** (0:01)
A royal family from a country that is smaller than parts of Bangalore decided to bet nearly a billion dollars on Indian startups. And for a while, that sounded like a genius move. Liechtenstein. You've probably never heard about it. It is a tiny principality in Europe, ruled by Prince Maximilian, whose full name I cannot pronounce for the life of me. His family also runs LGT, which is one of the world's largest private banking groups. The family's investment arm is called Lightrock. And in 2019, Lightrock came to India with a clear plan. Find growth stage companies, take large stakes and keep backing them and be the patient investor that everybody says that they want but rarely gets. They were not slow about it either. In just 18 months, they deployed about $400 million across 25 companies. Pharmeasy, Porter, Shiprocket, Waycool, Dunzo, these are names that you know. By the time three years had passed by, that number had climbed to $700 million.
This is a pace that is usually associated with far larger firms. So naturally, founders loved them. Lightrock was seen as a deep-pocketed loyal partner. They kept showing up in follow-on rounds. They had one limited partner, the Liechtenstein family, which meant no fundraising circus, no misaligned incentives, just long-term capital doing long-term things. But here is the problem with being the most patient investor in the room. Patience is only a virtue when companies that you are patient with are actually going somewhere.
Many of Lightrock's biggest bets are now in trouble. One of their portfolio companies needed Lightrock to step in and pay off its loans, something that almost no VC ever does. And the two people who built Lightrock's India business from scratch, have both quietly walked out of the door. So what really happened when this royal family brought billion dollars to India's startup ecosystem and just kept believing?
Welcome to Daybreak, a business podcast from The Ken. I'm your host Snigdha Sharma and I don't chase the news cycle. Instead, every day of the week, my colleague Rachel Varghese and I will come to you with one business story that is worth understanding and worth your time.
Lightrock's India story starts with an acquisition. In 2019, LGT bought Aspada, a small impact investing firm run by Kartik Srivatsa and Thomas Hyland. It was considered a masterstroke. No other Indian fund had managed to bring in a single deep-pocketed backer of this scale. Aspada had previously been funded solely by the Soros Economic Development Fund. But after deploying about $70 million over the course of eight years, Soros wanted the firm to grow up and diversify.
LGT offered exactly that at a much larger scale. Prince Maximilian himself bought out Aspada's entire portfolio for roughly $100 million and folded it into a global impact investing platform across Asia, Africa, and Latin America.
Overnight, the game had changed. Srivatsa went from writing checks of a few $100,000 to deploying roughly $20 million per deal. Vedhehi Ravindran, who had previously worked in oil and gas, rose quickly within the firm to become a partner and co-lead an ascent that surprised many people internally. The strategy was quite deliberate. Take 15 to 30% stakes, back companies in sectors that need patient capital, like agriculture, energy, logistics, reserve about 40% of the capital for follow on investments, higher than the industry norm. And most importantly, expect about 20% of the portfolio to deliver outsized returns, 60% to return one to two times capital, and only 20% to fail.
That math works if the top performers actually perform. And for a while, the conditions were perfect. This was the zero interest rate era. Indian startups raised a record $42 billion in 2021, deploying large amounts quickly was expected. India became central to Lightrock's global strategy, accounting for nearly 30% of its total deployment at one point. Every investment, however, needed approval from the Global Investment Committee, often including the Prince himself. That did slow some decisions down, but the pace remained aggressive. The problem with moving fast in boom times is that you do not always know what you have actually bought until the boom comes to an end. More on this in the next segment.
By 2022, things had started to look different. The funding winter had arrived, and suddenly, Lightrock needed to tell a story, not just to founders, but to new investors, because the plan was always for India to eventually raise its own external fund.
That story was getting harder to sell. Peers like Temasek and Softbank could point to large realized gains. Lightrock's returns were modest and mostly on paper. Its biggest exits, Aave Finance, Umid Finance and Porter, together totaled an estimated $150-200 million.
Porter alone was expected to yield around $250 million, which is respectable, but nowhere near the kind of exit that resets a fund. Meanwhile, parts of the portfolio were moving in the wrong direction. Pharmeasy had fallen from a $5.6 billion valuation to roughly $450 million only. Axio sold to Amazon for around $200 million, a muted outcome by any measure. Dunzo, which Lightrock backed in 2022 alongside Reliance Retail, was shutting down dark stores within a year.