Japan's MUFG to consolidate Ganesha Fund with Dragon Funds, to raise new vehicle

New Delhi, June 24 -- Mitsubishi UFJ Financial Group has decided to consolidate its India-focused investment vehicle Ganesha Fund with its broader global growth-equity investment platform Dragon Funds in a move to bring the management of both vehicles under a unified team and structure.

Japan's largest financial group said in a statement Wednesday it will bring the operating functions of the MUFG Ganesha Fund under Mars Equity M.C. Pte Ltd, its Singapore-based subsidiary that manages Dragon Funds.

The group also said it is planning to launch the second vehicle in the Dragon Funds series with a corpus of $600 million. The new fund, which will raise capital from Japanese and international limited partners, intends to back companies in high-growth markets around the world, including India.

MUFG Bank, the commercial and retail banking unit of Mitsubishi UFJ Financial Group, had set up Ganesha fund to invest in Indian startups in 2022. It committed $300 million for the vehicle that focused on backing middle- to late-stage Indian startups.

In September 2023, it launched Dragon Funds, under its joint venture Mars Growth Capital with Israeli fintech firm Liquidity Capital. MUFG committed $500 million to the vehicle that targeted mid- and late-stage startups mainly in Asia and Europe. It backs companies across global markets, with India as a core focus.

Now, MUFG is bringing these under the same umbrella to 'manage the fund in an integrated manner', it said.

"Through the integrated management of Ganesha by Dragon Funds, MUFG will deepen its relationships with India's startup and technology ecosystem and, acting as a bridge between Japanese and global investors and operating companies, will contribute to the creation of sustainable value," MUFG said.

The Ganesha Fund backed startups such as commerce and payments platform DotPe and software-as-a-service startup Lentra. MUFG has also invested in fintech firm DMI Finance, KreditBee, and Neo Group.

Meanwhile, the Dragon Fund has invested in Meesho, Zepto, and MoEngage, among other Indian companies. The new vehicle is expected to make growth-stage technology and technology enabled companies.

"India is a high-growth market that is expected to become the world's third-largest economy by GDP by 2030, driven by rapid population growth and economic expansion. MUFG positions India as a market of critical strategic importance," it said.

Published by HT Digital Content Services with permission from VC Circle.