The Indian startup ecosystem has witnessed an unprecedented surge, with a multitude of entrepreneurs emerging to address real-world challenges. However, for first-time founders, securing early stage funding can be an overwhelming endeavour. 

In such circumstances, angel investors play a crucial role. These high-net-worth individuals (HNIs) provide financial backing to startups in their nascent stages in exchange for equity. Here, we will demystify the intricacies of early-stage funding and provide invaluable insights and strategies to help Indian entrepreneurs attract angel investors.

Angel Investors & Raising Angel Funding

Angel investors are wealthy investors who invest in promising early-stage startups in exchange for ownership equity in the company. These individuals actively seek opportunities to support innovative ventures and are willing to take calculated risks. Collaborating with angel investors offers several advantages to startups, including financial backing, mentorship and access to extensive networks.

In today’s startup landscape, securing angel funding can make or break a startup. Attracting the attention of angel investors can be tricky, as these HNIs take unproven investment risks with their wealth, funding unprecedented startup models, while some angel investors are selective towards certain sectors.

One critical trap to avoid is the lack of a strong value proposition. Angel investors want to see what sets your startup apart from the competition and why they should invest. Failing to clearly articulate your unique value proposition can significantly diminish your chances of securing funding.

Equally important is conducting thorough market research. Investors need assurance that there is a realistic product-market fit for the innovation. A deep understanding of your target market and its potential can help gain investors’ interest. Financial planning and projections also play a pivotal role in investor confidence. Investors want to see a well-defined plan for using their funds. If your financial projections are inaccurate or overly optimistic, you risk losing credibility. 

Another crucial aspect is delivering an effective pitch. Your pitch serves as the first impression on potential investors. Investors wish to seek clarity on the business model and the vision of the founding team based on which they gauge the execution capability of the founder. Covering these aspects is crucial for founders while pitching.

Moreover, targeting the right investors is paramount. Not all investors have the same interests or specialise in your industry. Founders need to spend time on research and target the right investor who can align with the sector and growth potential.

Recognising the importance of networking must not be overstated. Building a strong network within the investor community can help tap the right individuals to support your startup. Networking opens doors to potential investors who may have otherwise remained undiscovered.

With the global angel investment market projected to reach $500 Bn by 2025 and significant investments being made in startups worldwide, navigating these challenges becomes important. In the US alone, angel investors contributed $29 Bn to startups in 2021, with an average deal size of $250K. Angel investors typically focus on seed or early stage startups, making their support instrumental for innovation and entrepreneurial success.

Founders need to be persistent and resilient throughout the fundraising journey. Securing funding often takes time and setbacks are common. Giving up too easily can hinder your ability to secure the funding necessary for your startup’s growth.

The post Demystifying Early Stage Funding: A Guide For First-Time Founders To Raise Angel Funding appeared first on Inc42 Media.

The Open Network for Digital Commerce (ONDC) has teamed up with Google Cloud to increase the adoption of ecommerce in India using generative AI.

As part of this partnership, they will launch a nationwide ‘Build for Bharat’ hackathon to foster an open ecosystem of developers, students, and startups to drive innovation within the ONDC framework.

The hackathon intends to develop solutions that democratise access to digital commerce, regardless of digital literacy, geography, or economic status, a joint statement said.

“This hackathon will serve as an ideal launchpad, enabling us to discover numerous gifted individuals and organisations with inventive concepts. This, in turn, propels the drive for innovation for Bharat by solving countless pressing challenges faced by merchants and consumers both in metro cities and smaller towns,” ONDC MD and CEO T Koshy said.

The hackathon will span three months and will offer mentoring and assistance to participants working to solve ecommerce challenges such as building better supply chain visibility, improving inventory management, creating targeted personalisation for consumers, among others.

Earlier in June also, ONDC and Google Cloud teamed up to launch an open sourced ONDC Open Commerce solution to help users and buyers onboard the ONDC platform seamlessly. The programme has been leveraged by 20 ecommerce companies as of now. 

As the next step to the strategic partnership, the two will enable buyers and sellers of all sizes across the country to use Google Cloud’s generative AI tools for seamless transactions. The AI powered tools will offer features like voice commands, product descriptions and image improvement, automatic translation of catalogues in local languages, among others. 

India is seeing a generative AI boom since the launch of Open AI’s ChatGPT. Last week, Google also announced that it would add its generative AI capabilities to ‘Search’ in India.

Meanwhile, the government-backed ONDC has been constantly expanding since its launch last year, onboarding new players and entering new segments. Most recently, the likes of Pepsico and Ola joined the open network.

Last week, ONDC also said that the number of restaurants on the platform surged to 50,000 from just 500 in February.

The post ONDC Partners Google Cloud To Boost Ecommerce Adoption Using Generative AI appeared first on Inc42 Media.

The Open Network for Digital Commerce (ONDC) has reportedly made changes to its incentive scheme to grant greater flexibility to buyer-side apps for providing discounts to consumers.

The changes also include reducing food category subsidies by 50% and expanding merchant density in 45 non-metro districts.

The notice about the fifth version of the incentive scheme was sent to network participants (NPs) on September 4, and it will come into effect from today, Moneycontrol reported.

Among the new changes, ONDC has increased the maximum amount that buyer-side apps can claim per week to INR 40 Lakh from INR 25 Lakh. It has also removed monitoring of discounts for specific orders.

Meanwhile, it has also made changes in discounts offered for some categories. While the average incentive has been reduced to INR 50 per order for orders exceeding INR 200 in the food and beverage (F&B) category, it has been kept unchanged at INR 100 for orders of above INR 200 for grocery and beauty products category, the report said.

Incentive has also been kept unchanged for electronics orders between INR 200 and INR 1,000.

In the previous version of the scheme, there was no distinction made based on product categories for the maximum incentive per order, with a uniform rate of INR 100 being applied across all categories.

Since its launch in 2022, ONDC has been working on establishing open protocols for all aspects of digital commerce, allowing buyers and sellers to use any compatible application or platform to conduct transactions. It aims to break silos of multiple ecommerce platforms and unify them with a single, open network.

The platform has been growing from strength to strength. It counts names such as Magicpin, uEngage, Bitsila, EkSecond, Growth Falcons, Mystore, nStore, and eSamudaay among its network participants on the seller side, while those on the buyer side include Pyatm, Pincode, and Meesho.

ONDC has also been gradually expanding its presence across categories, including grocery delivery, mobility and fintech.

The post ONDC Revises Incentive Scheme To Offer Flexibility To Buyer Apps appeared first on Inc42 Media.

Alternative investment firm (AIF) Anicut Capital has secured an investment of INR 50 Cr from the Small Industries Development Bank of India (SIDBI) for the Anicut Equity Fund. The investment comes through the Fund of Funds for Startups (FFS), launched under the Startup India Initiative by the Government of India.

Anicut Equity Fund launched its Grand Anicut Fund III in June 2022 with a target corpus of INR 500 Cr, with an additional INR 250 Cr green shoe option. The investment firm claims to have closed two-third of the fund and has also received a commitment of INR 75 Cr from Self Reliant India Fund (SRI).

Founded in 2016 by Ashvin Chadha and IAS Balamurugan, Anicut Capital offers debt and equity investments. It is currently managing three debt funds, one angel fund and one early growth equity fund with a cumulative AUM of INR 1600 Cr.

Anicut Capital’s portfolio includes startups like Wow! Momo, Bira, Sugar Cosmetics, Earth Rhythm, Wingreens, Blue Tokai, ShareChat, Mcaffeine, Milkymist, XYXX, Curatio Healthcare, Agnikul, and Grip Invest.

Through its third fund it has already invested in 6 startups in consumer and technology sectors. It plans to back 12-14 growth stage (Series A & B) startups across Anicut and non-Anicut portfolio in the next 18-24 months from the Fund III.

Last year, Anicut Capital secured regulatory body SEBI’s approval for INR 1,500 Cr third debt fund named Grand Anicut Fund 4 as well.

This comes at a time when VC, angel and PE investors have announced 52 funds worth nearly $4 Bn this year to support Indian startups at various stages despite the funding gloom embracing 2023 too.

According to Inc42, 38% (or 20 funds) of the total funds announced this year focus solely on early-stage startups. Aeravti Ventures, 3one4 Capital, and Arkam Ventures are among the venture capital (VC) firms that have launched funds specifically targeting early-stage startups this year.

The post Anicut Secures INR 50 Cr From SIDBI’s Fund Of Funds appeared first on Inc42 Media.

Early stage venture capital fund Unicorn India Ventures (UIV) has announced the first close of its INR 1,000 Cr Fund III at INR 225 Cr. The VC firm is looking to close the fund by March 2024.

Unicorn India Ventures plans to back 25 startups focused on global SaaS and digital platforms through this fund. Fund III is looking at newer sectors of climate tech, agritech, spacetech and the semiconductor ecosystem. 

Fund III would look at investing a first cheque of around $1 Mn – $2 Mn and would then look to invest in the follow-on round. As a part of its investment thesis, UIV invests only 20% of its investible corpus to create the portfolio and the rest to back the winners of the portfolio.

Started in 2016 by Bhaskar Majumdar and Anil Joshi, Unicorn India Ventures launched Fund II, an INR 300 Cr fund in 2020, with its first fund coming in 2019. With two funds under management, Unicorn India Ventures has an active portfolio of over 35 startups. According to the firm, the internal rate of return (IRR) was more than 60% year over year for its first fund.

Bhaskar Majumdar, managing partner of Unicorn India Ventures, said, “Being the first institutional investors, before making any investment we spend considerable time with the founders to understand their vision, team’s capabilities, growth plans and leadership style. Our focus is to invest in companies that are enablers of India’s digitisation across sectors. We avoid high cash burn businesses like D2C, Consumer Internet and content businesses.”

Unicorn India Ventures has also announced senior hiring for Fund III. Former Aavishkaar Group partner Bikram Mahajan is joining as a partner, while former Edelweiss AVP Kamlesh Ahuja is joining as VP (fund operations).

Anil Joshi, managing partner of Unicorn India Ventures, added, “Our key differentiator is that we are present across India and believe that India’s startup landscape has changed immensely over the past couple of years. With this third fund, our commitment to nurture Indian startups will be unwavering and we will keep scouting for highly innovative companies whose disruptive solutions can address real-life problems of users by leveraging technology.”

Joshi added that more than 60% of the VC firm’s portfolio startups come from emerging regional hubs like Kochi, Jaipur, Ahmedabad, Pune and Hyderabad. “Unicorn is perhaps the only fund that has worked tirelessly with the state governments in Kerala, Orissa, and Madhya Pradesh to roll out a startup policy to find high-potential startups from Tier II and III cities,” Joshi added.

Through its first and second fund, Unicorn India Ventures has backed startups such as neobanking unicorn SmartCoin, Open Bank, Sequretek, Pharmarack, Genrobotics, Clootrack, Probus and Gamerji.

The VC firm’s first close of its third fund comes as investors active in India have been stockpiling dry powder to invest in Indian startups. According to data compiled by Inc42, funds worth nearly $4 Bn have been launched or announced in India since the start of 2023.

The post Unicorn India Ventures Announces First Close Of Fund III At INR 225 Cr appeared first on Inc42 Media.

It’s not often that a company uses its YouTube channel to talk about a major corporate restructuring decision. That’s what PhonePe did when its CEO Sameer Nigam spoke to CTO Rahul Chari in January this year.

The subject of their discussion: PhonePe’s decision to redomicile to India. Nigam, the cofounder and CEO, said that as many as 20 unicorns were willing to shift their bases to India if regulations were eased.

However, the company’s investors had to cough up INR 8,000 Cr ($966 Mn+) in taxes for PhonePe to redomicile to India. While it was manageable for a mammoth like Walmart-backed PhonePe — and the blow softened by subsequent fundraises — not every startup based outside of the country has the means or resources to relocate to India.

In PhonePe’s case, the costly move back was for its IPO plans, another reason why this is an exception.

U-turns such as PhonePe’s are rare due to India’s stiff laws and regulations related to startups coming back to India. The tax bill is one thing, but there are many compliance headwinds.

But PhonePe’s move has prompted the likes of Razorpay, Meesho and Groww to also consider the same. These are also large startups that have the deep pockets for such a move, but the same cannot be said for smaller, early-stage ventures.

Here, too, the sparks to ignite the spirit of ‘Desh Wapsi’ are now visible, but questions about how they can come back to India persist. Could the answer come from the GIFT IFSC?

A GIFT For Indian Startups

Envisioned as a virtual offshore destination for startups and investors, GIFT IFSC could be key to bringing back startups to India. That’s why a 10-member expert committee on ‘Onshoring Innovations To GIFT IFSC’ was set up in March this year, which has submitted its report, identifying key areas that will help Indian startups settled abroad to reverse flip to India.

Set up by India’s International Financial Services Central Authority (IFSCA), the expert committee is chaired by the RBI’s former executive director G Padmanabhan. Further, the GIFT IFSC’s expert committee counts Dipesh Shah, executive director, IFSCA; Sumeet Jarangal, director, DPIIT; Nishith Desai, founder, Nishith Desai Associates; Siddarth Pai, founding partner and CFO, 3one4 Capital; Nikhil Kamath, cofounder, Zerodha; Lalit Keshre, cofounder and CEO, Groww; Anjani Sharma, CA; Anjali Bansal, founding partner, Avaana Capital, and Sandip Shah, GM, GIFT City, as its members.

Speaking with Inc42, committee chairman Padmanabhan said, “This is one of the most important committees I have chaired in my career spanning over three and a half decades. The issue has far-reaching implications for the country looking to be the innovation hub of the world. It is a travesty that companies owned and controlled by Indians, employing Indians, and doing most of the work from India have holding companies set up and domiciled overseas on paper. This issue gets the attention of the Government of India, leading to IFSCA setting up this committee. In my view, it is a very timely step.”

He added that the committee has looked at the problem areas holistically, made recommendations and floated incentives to help companies reverse flip to India.

“I hope these recommendations are accepted for implementation, and we achieve what we have set out to achieve for the GIFT city — Onshoring the Offshore,” Padmanabhan said.

Understanding Why Startups Flip

The Indian startup ecosystem has witnessed remarkable growth over the years, evolving through different waves of innovation and entrepreneurship. However, a concerning trend emerged, which is the increasing prevalence of startups flipping or essentially registering a holding company abroad with an Indian subsidiary.

This trend involves Indian startups moving their holding companies to foreign jurisdictions, potentially leading to significant economic and intellectual capital loss for India. This could also be understood by the fact that out of 111 unicorns, more than 20% are registered outside India.

3one4 Capital’s Pai said that when the committee began delving into the root causes that trigger the phenomenon of startup flipping, it found that the trend is predominantly driven by investor demands.

In particular, global early-stage programmes have made demands that startups shift their bases to specific geographies to avoid compliance issues in India. This investor demand is rooted in the familiarity with the legal frameworks of those specific jurisdictions, which are more often than not the US or Singapore.

“Pushing Indian startups to flip provides investors with a more convenient recourse in case of legal matters. For instance, jurisdictions like Delaware offer a robust corporate law framework that has gained significant traction due to its comprehensive and extensively practised business regulations. This familiarity makes it more convenient for investors to navigate legal complexities. Adding to the complexity of the issue, a significant portion of funding, approximately 85%, received by Indian startups originates from foreign sources,” Pai told Inc42.

Further, from an income tax standpoint, the tax rate on capital gains for non-residents is only half of what residents pay. This significant disparity creates a clear economic incentive for startups to consider moving their domicile overseas.

Alongside these tax considerations, operational challenges further complicate the situation. Many startups with global, recurring billing, such as SaaS companies, often do not generate traditional physical invoices. Instead, the billing process is typically directed towards their respective platforms or may involve direct debit mechanisms.

Unfortunately, as these are payments from non-residents, the current system requires these digital transactions to be processed through physical forms submitted to the bank in order to credit the foreign revenue to their account.

This operational hurdle adds an extra layer of complexity, adding more friction to the process, Pai noted.

Challenges Of Startups Shifting Their Headquarters Abroad:

• Brain Drain & Talent Flight: A direct consequence of startup flipping is the migration of founders and key talent to foreign countries. This results in a significant loss of entrepreneurial expertise and innovative capabilities within India, hampering its growth potential.
• Wealth Erosion: When holding companies are moved abroad, the wealth generated by Indian startups is often concentrated outside the country, benefiting foreign economies. This wealth erosion can impact domestic investments and economic stability.
• Intellectual Property Loss: Many Indian startups externalise due to stronger intellectual property protection laws in foreign jurisdictions. This leads to the loss of valuable intellectual property and technology that could otherwise contribute to India’s innovation landscape.
• Reduced Tax Revenue: Externalisation can result when Indian startups have an option to pay lower corporate taxes in foreign countries. However, due to this the Indian government loses revenue, which otherwise could have been used to spur development.
• Impact On The Nation’s Image: Startup flipping weakens India’s global position, especially concerning digital diplomacy and cross-border financial inclusion initiatives. It diminishes India’s ability to advocate for digital financial services and inclusive finance agendas worldwide.

Luckily, taking cognisance of this, the executive committee has tabled recommendations in key areas like building a competitive tax regime, the need for enhanced IP protection, ESOP taxation reforms, access to domestic capital supporting companies’ global expansion plans and more government-startup collaborations, which will likely encourage startups to reverse flip.

Here’s a sneak peek into the recommendations made by the 10-member executive panel to boost reverse flipping among Indian startups.

Will GIFT IFSC Push Startups Towards ‘Desh Wapsi’? 

The Indian government’s efforts to integrate the country’s economy with the global financial system have led to the establishment of the Gujarat International Finance Tech City (GIFT City) or GIFT IFSC.

This initiative aims to create a global financial hub within India to attract international businesses and capital. The IFSCA was established to regulate and develop IFSCs in India, assuming the powers of several domestic sector regulators. The GIFT IFSC has experienced substantial growth across various financial sectors, with over 530 registered entities as of June 2023, showcasing the remarkable progress of the initiative.

Speaking at Inc42’s MoneyX in July, Dipesh Shah, executive director (development), IFSCA, said that GIFT has triggered reverse flipping and countries like Singapore and Mauritius are asking private equity (PE) investors what needs to be done to stop them from moving to the IFSC.

“We have structured the GIFT IFSC to stop the trend of entrepreneurs moving abroad in search of better opportunities and simpler regulations. Whatever tax and other benefits PE investors would get (there), we are offering similar facilities here,” Shah had then said.

Meanwhile, a significant aspect of the GIFT IFSC’s development is its focus on fostering a world-class fintech ecosystem. The convergence of finance and technology has been a critical consideration since the inception of the GIFT City. The IFSCA also has the IFSCA FinTech Entity Framework in place for fintech activities.

Various sandboxes are also being established to encourage innovation and collaboration, with over 40 fintech companies approved under the framework. Further, the IFSCA’s FinTech Incentive Scheme supports fintech activities by offering grants and financial support to eligible entities.

The collapse of prominent US banks, including Silicon Valley Bank, in March 2023 had a direct impact on Indian startups that had deposits in these banks. This situation highlighted the GIFT IFSC’s potential to provide a secure alternative for these startups, given its offshore status, favourable regulatory framework, and competitive tax regime.

The crisis also underlined the GIFT IFSC’s role in positioning itself as a preferred jurisdiction for global and Indian startups, offering them stability and a conducive business environment.

The GIFT IFSC’s positioning as an ideal destination for reverse flipping Indian startups is rooted in its offshore jurisdiction within India, ease of doing business, competitive tax regime, access to a vibrant private equity and venture capital ecosystem, its status as a global fintech hub, and other key enablers like a skilled talent pool and advanced technological infrastructure.

The Reverse Flipping Road 

According to an analysis conducted by Inc42, approximately 65% (or 13) of Indian unicorns with headquarters abroad operate in the enterprise tech (SaaS) sector. The remaining unicorns originate from diverse sectors, including ecommerce, media and entertainment, travel tech, and clean energy.

Last year, Inc42 reported that more than half a dozen Indian crypto startups had shifted their operations to destinations such as Dubai, Delaware, and the British Virgin Islands (BVI).

This shift can be attributed to several factors, including the challenges posed by the crypto winter, the Indian government’s introduction of TDS for crypto transactions, and an increasingly stringent regulatory environment within India. The rapidly evolving regulations in India have adversely affected not only crypto startups but also the broader fintech landscape.

According to 3one4 Capital’s Pai, the report acknowledges the reasons for flipping as taxation disparity, operational hurdles, tax issues, legal frameworks, etc. and makes suggestions based on market feedback on what is needed to allow such flipped startups to redomicile to India.

The report also hopes to drive dialogue and discussion on the matter and serve as a resource for easing the conditions that prompted such flips.

Even as the winds of change are yet to embrace startups settled abroad, the recommendations by the 10-member expert panel seem a move in the right direction.

The challenge now lies in getting the government to adopt these recommendations and present them to startups as a viable solution.

[Edited by Shishir Parasher]

The post Igniting The Spirit Of ‘Desh Wapsi’: How The GIFT IFSC 10-Member Panel Wants To Clip The Startup Flip appeared first on Inc42 Media.

“In times of crisis and dilemma, mentors can be great teachers for founders, but no one can claim to be a great mentor. It’s a relationship you need to build over time,” – Mohandas Pai, cofounder and chairman, Aarin Capital

The former Infosys CFO has a unique point of view when it comes to Indian entrepreneurs and founders, as someone who has seen the startup ecosystem grow and flourish from the very early days.

About mentorship, Pai believes it’s a core responsibility of those who have seen the ecosystem come up from scratch. “We are seeing so many first-time founders and they often think being a founder is about being a cowboy. But that style doesn’t work and that’s when they feel the need for a mentor,” Pai said ahead of India’s national Teachers’ Day.

As the CFO of Infosys from 1994 to 2006, Pai brought a ton of experience to the tech industry when he became an active angel investor and then founded Aarin Capital. In his opinion, the Infosys experience is a critical asset for him in his role as mentor for the founders he has backed.

Besides Aarin Capital, Pai also launched Exfinity Ventures and has been a key advisor for 3one4 Capital as well as Ideaspring Capital. Over the years, the Padma Shri awardee has been a key investor in startups such as edtech giant BYJU’S, Shiprocket-owned Wigzo, Pocket Aces, Licious, Faircent, among others.

However, often founders believe that investors are overstepping the line when it comes to mentoring and guidance. How does Pai bring in the balance in his approach?

“It’s an organic relationship and as someone who invests in the early stage — the first cheque — I have to be available when the founders need me. Of course, I have to emphasise that I cannot take the decision for a founder, but we can explain the possibilities and potential implications of the decision,” he added.

While clarifying that VCs don’t run companies, Pai says that often founders don’t have the right approach. They believe that investors will take the company away from them if there is a wrong decision or some issues.

“Founders are very reluctant these days because such is the market. They have to remember that even if the market bounces back, the money may not be around, but mentors will be,” Pai, a founding partner at Aarin Capital added.

Pai stressed on the fact that investors across stages have to add value to their relationship with founders. It’s not just about the money or the cheque being written, but also what kind of trust is built over time.

Of course, besides writing the seed stage cheques, Pai is a director on several boards. Most recently, he joined BYJU’S as part of the advisory council for the company. Pai was one of the edtech decacorn’s early backers and has returned to mentor the company’s cofounder and CEO Byju Raveendran at a critical time.

While he did not comment directly about his role at the edtech giant, his overarching view is that founders need help at all stages of their company’s life cycle.

“At a $50 Mn valuation, the kind of help and advice they [founders] need is different than at a $500 Mn or at a $5 Bn valuation. But even at that stage, founders are not superheroes. Everyone learns on the job, and to execute fast growth you need the helping hand of someone with the right experience,” Pai added.

The post Money May Not Be Around, But Mentors Will Be: Mohandas Pai  appeared first on Inc42 Media.

Brij Singh Bhasin, a general partner (GP) at the early stage venture capital firm Rebright Partners, has stepped down to launch Snow Mountain AI, a generative AI-focused startup.

“Today, I step down as a General Partner from Rebright Partners and start a new chapter as Founder of Snowmountain.ai, a tech startup building next-gen software using Gen AI,” said Bhasin in an X post.

The outgoing GP added that he will be a part-time partner with Rebright and transition day-to-day portfolio support, new investments and fund management to new and existing team members. “I’ll continue to provide strategic support to our portfolio founders and refer new investment opportunities to the firm & our LPs,” Bhasin added.

Snow Mountain AI will also receive investment from some of Rebright’s LPs and ‘will continue to collaborate closely in the future as well’, Bhasin said.

Founded by Takeshi Ehibara, Rebright Partners has invested in 23 Indian startups so far, including Medikabazaar, InShorts, LetsTransport and MediBuddy. The VC firm invests at seed to Series A stages and has a ticket size of $200K-$1.5 Mn. 

Brij Bhasin used to lead India investments at Rebright Partners. He was a part of the founding team of GSF Accelerator before joining Rebright. His new venture, Snow Mountain AI, will be working in generative AI. 

“We use advanced AI agents to streamline and automate complex business processes in Finance, Compliance, Legal and Operations. These “agents” act as digital teammates to review documents, extract data, make decisions, and complete workflows end-to-end,” the company’s website reads.

Snow Mountain AI is Bhasin’s second shot at entrepreneurship. Earlier, he founded the mobile app development startup Boost Tech in 2011. He exited the startup in 2012 to join Little Eye Labs, which was later acquired by Facebook, as an advisor. 

In an environment where startup founders are turning investors, with many of them either launching funds to back startups or working as angel investors, Bhasin is taking the reverse route, going from investor to entrepreneur. 

The post Rebright Partners GP Brij Bhasin Quits; Launches New Startup appeared first on Inc42 Media.

There is no denying the fact that India today has firmly established itself as one of the largest global hubs for innovation and entrepreneurship.

Not to mention, the country’s burgeoning startup ecosystem, which saw the launch of over 68K startups between 2014 and June 2023, has played a pivotal role in catalysing the nation’s reputation as the hotbed of innovation, and revolutionary ideas and technologies.

The surge in the number of startups being churned out can be attributed to several positive factors, including a tech-savvy youth population, an expanding middle class, and a favourable regulatory landscape.

And it is on the back of these key elements, along with an ever-increasing battalion of Indian startups, including unicorns and soonicorns, India’s Gross Domestic Product (GDP) is projected to experience a surge of 5-10% by 2030, outlines the 2023 edition of Inc42’s “The Ecosystem” report.

With a GDP growth rate of 6%, India’s economy is expected to outpace the growth of the United States (4%) and the European Union (1%), trailing only behind China (9%) in the next decade.

Indian Startups To Become Key Drivers Of Growth

Indian startups have transitioned from being primarily service-oriented to becoming leaders in product innovation, demonstrating their technological prowess across various sectors. This transformation has elevated India’s stature on the global tech stage, drawing parallels with more established economies.

Further, the increasing annual household income has contributed significantly to this growth. Projections show that approximately 50% of households are set to have an annual income exceeding INR 5 Lakh by 2030, up from 33% in 2019.

This rise, combined with over 23 Mn households expected to earn more than INR 20 Lakh by 2030, will boost consumer spending.

Other factors expected to give India’s GDP a booster dose are

• The number of tech startups is predicted to grow 2.6X from 68K in 2023 to 1.8 Lakh in 2030, resulting in a substantial rise in job opportunities. The startup ecosystem has already generated over 768K jobs since 2014.
• India holds the position of the world’s largest consumer internet market, with tech giants like Google, YouTube, WhatsApp, and Facebook amassing millions of Indian users.
• Emerging tech startup hubs in Tier II cities, such as Jaipur, Kolkata, and Chandigarh, are fostering a new wave of entrepreneurship and innovation.
• As deep-pocketed global investors recede, domestic investors are entering the ecosystem, leading to increased investments and cash flow within the economy.
• Investor engagement is set to grow by 46% by 2030, with Indian high-net-worth individuals (HNIs) and family offices demonstrating strong enthusiasm for the Indian startup ecosystem.
• The number of Indian HNIs is projected to reach 1.7 Mn by 2027, growing at a CAGR of 16%, outpacing growth rates in other major economies.

Notably, the startup-led disruption will not only result in job creation but also transform consumption patterns, with new-age ventures addressing many challenges across sectors and industries.

Furthermore, India’s relatively untapped market offers burgeoning startups the chance to enter uncharted territories and address significant real-world issues, contributing to the nation’s economic upliftment.

Marching Ahead Despite Headwinds

Despite the optimism that the Indian startup economy is the third-largest in the world today, challenges persist.

One of the primary pain points is the need for sustained funding access across various growth stages of startups, which right now is the bone of contention between investors and founders. Regulatory complexities and bureaucratic obstacles, too, have impacted the operations of many startups working in specific sectors — one such example is the online gaming industry.

Today, the need of the hour is to streamline processes and cultivate a startup-friendly regulatory environment to sustain the momentum that the country has received from the startup boom. This is especially crucial at a time when Indian startups have a key role to play in the evolution of technologies like AI, blockchain, and IoT, among others.

Additionally, Indian startups have not only expanded within the country but also globally, with a significant surge in exports and the success of the D2C startup ecosystem in international markets. According to an Inc42 analysis, more than 20 digital-first brands have already made their foray into international markets like the UAE, the US, and the UK, just to count a few.

The startup surge in India heralds a new era of economic progress and innovation. With a potent blend of youth, tech prowess, supportive policies, and real-world problem-solving strategies, Indian startups are set to play a pivotal role in boosting the nation’s GDP.

As startups continue to drive job creation, introduce disruptive technologies, and reshape consumer behaviour, the influence of startups on India’s economy is destined to solidify going ahead, paving the way for the country to become the world’s biggest startup powerhouse in the years to come.

The post Startup Boom Poised To Drive 5-10% Surge In India’s GDP By 2030 appeared first on Inc42 Media.

New-age tech stocks continued their winning run this week on the back of a recovery in the broader domestic equity market.

Ten out of the 16 new-age tech stocks under Inc42’s coverage gained this week between 1% and 15%, with the recently-listed Yudiz emerging as the biggest winner.  

Yudiz got listed on the NSE SME platform on August 17 this year at INR 185 apiece. This week, the startup’s shares jumped 14.8% to end Friday’s session at INR 202.7.

CarTrade Technologies, Nazara, EaseMyTrip, Delhivery, and Zomato were among the other gainers of the week.

However, despite the revival in the broader market that broke the five-week losing streak, shares of Paytm, Nykaa, DroneAcharya, MapmyIndia, Fino Payments Bank, and ideaForge fell this week. Paytm slumped almost 5%, emerging as the biggest loser this week.

In the broader market, Sensex rose 0.77% while Nifty 50 gained 0.9% this week. The benchmark indices rallied significantly on Friday alone, as Sensex jumped 0.86% and Nifty 50 0.94% to end the week at 65,387.16 and 19,435.30, respectively.

The rally on Friday was largely aided by Q1 Gross Domestic Product (GDP) numbers. According to the National Statistical Office’s data, India’s GDP grew by 7.8% in the April-June quarter of FY24 as against a 6.1% growth in the preceding quarter – Q4 FY23.

Stepping into the new month, the market is brimming with various domestic and global macroeconomic indicators that are expected to sustain their momentum, said Pravesh Gour, senior technical analyst at Swastika Investmart.

However, he said that “below normal” monsoon rainfall this year is expected to have a significant impact on market trends.

Meanwhile, Amol Athawale, vice president of technical research at Kotak Securities, said, “While there will be some challenges going ahead due to weak monsoon activity, overseas funds may continue to bet on India due to signs of strong growth performance going ahead.” 

“Technically, the Nifty has formed a double bottom formation on daily and intraday charts, which indicates a strong possibility of a fresh uptrend rally from the current levels,” he added.

Now, let’s dig deeper into the performance of some of the new-age tech stocks this week.

The 16 new-age tech stocks under Inc42’s coverage ended the week with a total market capitalisation of $37.24 Bn as against $36.36 Bn last week.

Paytm The Biggest Loser

Reversing the 4.6% gain last week, shares of Paytm declined 4.7% this week. 

The drop came after Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares, or a 3.6% stake, in the fintech major last Friday.

Besides, we must also note that after months of anticipation, Reliance announced this week that its newest entity Jio Financial Services (JFS) will offer products in the payments and insurance segments.

Earlier, many analysts said that the entry of deep-pocketed JFS could pose a significant competitive threat to Paytm.

During Reliance’s annual general meeting, its CMD Mukesh Ambani called JFS as the world’s highest capitalised financial services platform at inception.

However, Paytm’s gains still remain a significant 61.5% year to date (YTD).

Kotak Securities’ Athawale said Paytm looks positive on the technical charts and the stock is holding a higher-bottom formation and is ready for the next rally. 

“The immediate support for the stock is around INR 830-INR 840 and on the higher side INR 920 is possible,” said Athawale, adding that further upside is also possible which can see the stock rising up to INR 940.

Nazara Touches 52-Week High

Shares of Nazara Technologies jumped 8.2% on Thursday to reach a 52-week high of INR 814.30 on the BSE this week. Though the stock pared some of its gains to end the day at 777.75, it was at a level last seen at the end of April last year.

Overall, Nazara shares gained 7.4% this week, ending Friday’s session at INR 759.2 in the exchange.

In The News For:

• Nazara said this week it is looking to raise capital via issuance of equity shares or securities on a preferential basis and would seek board approval for the same.
• As per a report, Zerodha founder Nikhil Kamath could possibly increase his stake in the gaming company to 3.5% from his current stake of around 1%.

Though the stock is facing some profit booking at a higher level, the texture is largely bullish, said Kotak Securities’ Athawale.

“The immediate support for the stock is around INR 720-INR 725. As long as the stock is trading above that, the upside momentum is likely to continue,” said Athawale, adding that Nazara shares could reach INR 810-INR 825 in the medium term.

Nazara shares are currently training around 31% higher YTD.

SoftBank Offloads Almost Half Of Its Stake In Zomato 

SoftBank’s SVF Growth (Singapore) offloaded Zomato shares worth INR 947 Cr in a block deal this week. 

As of quarter ended June 2023, SVF held 28.7 Cr shares in Zomato, which translated to a 3.35% stake in the foodtech major.

In its latest block deal, the VC major sold 10 Cr Zomato shares, or 1.16% of its stake in the company.

Following SoftBank’s stake sale, Zomato shares fell in two consecutive sessions, reversing the sharp rise seen at the beginning of the week.

Despite the fall, the startup managed to gain 6.9% this week, ending Friday’s session at INR 97.23 on the BSE.

It must be noted that the shares sold by SoftBank were bought by several investment firms and banks, including BNP Paribas Arbitrage, Citigroup Global Markets Mauritius, Axis Mutual Fund, and Morgan Stanley Asia Singapore.

Meanwhile, Zomato, on Friday, informed its stakeholders that Lunchtime, a step-down subsidiary of Zomato Limited, situated in the Czech Republic initiated the liquidation process.

“…the dissolution of Lunchtime will not affect the turnover/revenue of the Company,” Zomato said.

This week, Zomato also announced the launch of a chatbot, Zomato AI, to enhance the customers’ overall food ordering experience.

After a rally, Zomato shares have started consolidating but the formation is positive, said Kotak Securities’ Athawale. 

The immediate support level for the stock is at INR 92-INR 93 and above that, it could rally till INR 110-INR 115 in the medium term, he added.

This week, Zomato once again crossed the $10 Bn market cap mark.

The post New-Age Tech Stocks Rally Amid Rally In Broader Market, Paytm Biggest Loser This Week appeared first on Inc42 Media.

While investors are taking a more cautious approach to funding, trends suggest that they are still open to investing in early stage startups that have the potential to make a big impact.

This can be further substantiated by the fact that approximately 50% of the total seed funding, at nearly $6 Bn, raised since 2014 has been raised between 2022 and July 2023 alone, according to Inc42’s latest data. 

However, there is a catch here. Even though there is no dearth of funding options for startups with great ideas, just having a groundbreaking plan is unlikely to guarantee any long-term success. Therefore, to turn their vision into a viable business, startups need mentorship, guidance and resources.

To give a much-needed boost to the great Indian startup dream amid the ongoing funding winter, VC firm Accel, which counts the likes of BookMyShow, Browserstack, Flipkart and Swiggy among its portfolio companies, has announced the third edition of its accelerator programme, Atoms. 

Scheduled to commence on 20 September 2023, Atoms 3.0 is a six month cohort-based programme curated to offer industry-specific guidance to startups operating in the AI (Artificial Intelligence) and Industry 5.0 sectors.

Under this programme, Accel is set to select three to seven early stage startups each for its two cohorts from India, Southeast Asia and the Middle East. In addition to mentoring, the accelerator programme will invest up to $500K in each startup. 

In Focus: AI & Industry 5.0 

Since completing the programme, Atoms cohort companies across diverse sectors such as SaaS, Web 3.0. healthtech, ecommerce and more have raised $160M+ from both Accel and other funds. However, this time around, the accelerator programme is taking a thematic approach. 

“Based on the feedback from our founders in Cohorts 1 and 2, we launched Atoms 3.0 as a thematic cohort programme. We have also observed that companies targeting a similar industry and at a similar stage of evolution get to learn from each other a lot,” said Prayank Swaroop, a partner at Accel.

The VC firm revealed that the decision to choose Industry 5.0 and AI as core sectors was driven by a combination of strategic foresight and the lessons gained from previous funding experiences.

Accel has invested and closely worked with the likes of Zetwerk, Detech Technologies, Ripik, Facilio and Haver Water – giving it a ringside view of how AI, robotics and other emerging technologies are revolutionising manufacturing, improving automation and minimising the need for manual labour. 

Besides this, the en mass adoption of generative AI has created a lot of excitement among investors for startups exploring this segment. Therefore, Accel is actively seeking visionary founders from Indian and Southeast Asian regions who aspire to shape the future of AI.

Why Early Stage Startups Should Apply

Much like the past editions, Atoms will bring in its community of experts to give early stage founders actionable insights into building sustainable business. The programme will also offer personalised mentorship tailored to each startup’s unique needs. 

“Zero-to-one is the most challenging journey for an entrepreneur, as it sets the foundation for the business. This is what Atoms 3.0 hopes to accomplish for its founders,” Swaroop said. 

As Atoms is primarily targeting startups in the pre-product or pre-revenue stage, its mentors will help these businesses identify the right product-market fit (PMF), gain customer loyalty and achieve sustainable growth. 

Once selected, cohort members can also access perks worth over $5 Mn from Accel’s network partners including AWS, Google Cloud, Azure, Airtable, Carta and more. Besides this, they are eligible for investments of up to $500K initially, and Accel may consider investing up to $2 Mn in follow-on funding rounds.

As AI takes centre stage, Indian startups find themselves in a favourable position when it comes to receiving funding support. According to NetBase Quid, India is among the top ten countries in terms of AI funding and startups in this industry collectively secured $7.73 Bn between 2013 and 2022. 

With a well-established track record of working with AI startups and providing tailored assistance during their early stages of growth, Accel can prove to be an ideal partner for innovative businesses looking to script their success stories. 

The post Atoms 3.0: Accel Invites Applications From Early Stage AI & Industry 5.0 Startups appeared first on Inc42 Media.

After a week of record-breaking investment, August ended on a quieter note with $341 Mn in startup funding. Following a surge in the third week of August, investment levels saw a significant decline in the fourth week. 

Between August 28 and September 2, Indian startups collectively secured $52 Mn across 12 deals — a 77.4% drop compared to the $231 Mn raised in the previous week, which also marked the emergence of a new unicorn after an 11-month hiatus. 

Funding Galore: Indian Startup Funding Of The Week [Aug 28 – Sept 2]

Key Startup Funding Highlights Of The Week

• Healthtech startup MediBuddy raised an additional funding of $18 Mn from its existing investors for strategic acquisitions, making it the biggest fundraise of the week.
• Boosted by Medibuddy’s investment, the healthtech sector emerged as the most funded this week, securing $18.5 Mn across two deals.
• Fintech and  enterprisetech were the front-runners with the highest deal count, securing $12.2 Mn and $4.5 Mn respectively across three deals each
• After a record seed funding of $14 Mn last week, this week, five early stage funding deals were recorded.

Other Major Developments From This Week

• The Indian government under the Grant for Research and Entrepreneurship across Aspiring Innovators in Technical Textiles (GREAT) will provide a grant of up to INR 50 Lakh to startups to promote technical textiles in the country.
• Venture capital (VC) firm gradCapital launched its second fund with a total size of $6 Mn to invest in student startups. 

The post From MediBuddy To SatSure — Indian Startups Raised $52 Mn This Week appeared first on Inc42 Media.

In a bid to empower future founders with actionable insights and help them create companies of scale, VC firm Accel has launched an open-source community-knowledge platform, SeedToScale 2.0. 

The recently unveiled platform is the improved version of the VC firm’s SeedToScale resource platform, which it floated in August 2020. Since its inception, the platform has provided industry experts a forum to share their insights into building successful ventures via reports, blogs, articles, data visuals, and podcasts, among other things.

The platform has not only helped the community of startups and founders gather actionable insights into building sustainable, high-growth companies but also fostered collaborations among more than 80 industry experts, founders, and mentors to produce an extensive library of over 300 knowledge pieces, encompassing all stages of company building. This has also helped the platform build a community of 500K users.

Upping the ante, Accel has now upgraded the platform to serve the community in a more efficient manner. The VC firm’s latest initiative, SeedToScale 2.0, envisions the platform as a collection of insights comprising the knowledge and experience of founders, journalists, venture capitalists, and industry experts. The content on the upgraded platform has been curated to give founders of new startups more comprehensive insights relevant to their unique contexts.

Anand Daniel, partner, Accel, said, “Accel is dedicated to supporting the startup ecosystem beyond capital investment, with a long-standing history of supporting founders with our mentorship, expertise, and network connections. SeedToScale 2.0 is another milestone in our ongoing commitment to empowering startup founders, by providing them with the tools and resources they need to accelerate their growth and amplify their impact.”

The US-based VC firm Accel which has been operational in India since 2008 and has backed companies like BookMyShow, Browserstack, Flipkart and Swiggy, among others.

SeedToScale 2.0’s Open-Source Approach

The open-source model is a way of creating software that allows anyone to access software for free. This allows multiple ideas and skills to make open-source solutions better. More importantly, the open-source approach democratises knowledge, paving the way for collaborations, accessibility and inclusivity.

With this approach, the new version of the SeedToScale platform invites industry experts across the Indian startup community to decentralise knowledge so that new entrepreneurs can build sustainable companies of tomorrow.

“We believe that real knowledge and experience come from those who are actively building companies, and invite experienced members across the startup ecosystem to contribute their perspectives on building in India to share with the community,” said Daniel.

Leaders from the startup ecosystem such as other VCs, founders, subject matter experts, journalists and anyone with a captivating story related to building and scaling startups can contribute to the platform.

By adopting an inclusive and collaborative approach, SeedToScale 2.0 aims to build a thriving ecosystem where ideas, experiences, and expertise come together to empower aspiring entrepreneurs and startup enthusiasts. The platform aspires to serve as a repository of valuable insights.

SeedToScale 2.0: What’s New?

The SeedToScale 2.0 platform offers enhanced UI/UX (user interface/user experience) compared to the first version. The new version of the platform is more user-friendly and organised, making it easier for users to find what they need on the website. The goal is to make relevant content more accessible to founders and platform creators who intend to share knowledge on the platform.

The upgraded site offers actionable insights for everyone and caters to those with limited attention span or time. 

SeedToScale 2.0’s New Features

• Visual language & user experience: The platform is redesigned for easier navigation for users.
• Focus mode: This mode helps increase content retention for users.
• Global search: Users can search for blogs, podcasts, and trending topics, among other things on the platform.
• Sector-specific indexed content: Users can browse for content industry-wise.
• Intuitive content taxonomy: This feature refines search capabilities.
• Highlights feature: For a quick read, snapshots of key takeaways from the content will be pinned on the website.

The platform will add a new section to the existing podcast, ‘SeedToScale 2.0 Specials’. The series will begin with a discussion between Jim Swartz cofounder of Accel and Anand Daniel, partner, Accel (Bengaluru office). The investors will talk about the evolution of startups and how venture investing began. They will also discuss the topic of why 2023 has been dubbed a year of reset in venture capital. 

Meanwhile, the second episode in the series will be hosted by other Accel partners – Mahendran Balachandran (Bengaluru office), Harry Nelis (London office) and Sameer Gandhi (San Francisco office), who talk about the forty years of Accel, along with the key takeaways of past years that will continue to be relevant in the times to come.

On A Mission To Strengthen The Startup Community

“Looking ahead, Accel will continue investing in entrepreneurship as a whole. We will continue to improve the SeedToScale platform to ensure that founders are not hindered by a lack of “how-to” knowledge when embarking on their startup journey,” said Daniel.

Moving ahead, Accel has several developments in the pipeline, including an AI-based conversational tool that will be trained to address specific questions of founders. This feature aims to provide personalised guidance to entrepreneurs facing unique challenges.

In addition to its existing learning programmes, Accel will introduce the ‘SaaS with Accel’ programme, specifically designed for SaaS founders.

The post How Accel’s SeedToScale 2.0 Platform Is Democratising Knowledge For New Founders appeared first on Inc42 Media.

The financial year 2023 proved to be a challenging period for Indian startups in the context of securing funding. Despite having substantial dry powder reserves of over $18 Bn as of December 2022, investors adopted a cautious approach.

Not to mention, the impact of bearish investor sentiments has seeped into financial year 2024 as well, leading to a significant 15% month-on-month decline in funding, with only $337 Mn raised in August 2023.

According to Inc42’s ‘Indian Tech Startup Funding Report Q1 2023’, 84% of Indian VCs surveyed said that growth-stage startups faced difficulty in raising funds.

However, despite the funding gloom embracing 2023 too, VC, angel and PE investors have announced 52 funds worth more than $3.8 Bn so far this year to support Indian startups at various stages.

According to Inc42, 38% (or 20 funds) of the total funds announced this year focus solely on early-stage startups.

While about $3.8 Bn worth of capital is meant specifically for India, there are funds such as B Capital and Nexus, which consider India as one of their investment markets. (We have not included them in $3.8 Bn).

In our effort to provide startups with up-to-date information on funding resources, we will continuously update this article with latest venture funds, their sizes, sectors of focus, and other relevant details.

For now, here’s a list of 52 funds, comprising details on their fund size, sectors in focus and more, which have been launched so far this year.

Editor’s Note: All funds have been placed in alphabetical order.

List Of Startup Focussed Investment Funds, Plans Announced By VCs, Investors And More

3one4 Capital (Fund IV)

Bengaluru-based venture capital (VC) startup 3one4 Capital closed its fourth early-stage investment fund, Fund IV, at $200 Mn in May 2023. 3one4 Capital will invest in early-stage startups (from pre-seed to Series A) with cheque sizes between $0.5 Mn to $5 Mn. 

Founded in 2015 by Pranav Pai and Siddarth Pai, 3one4 Capital is an early-stage venture capital firm based in Bangalore, India.

The VC firm said it would focus on sectors such as consumer internet, SaaS and fintech while increasing investments in newer areas such as health tech, climate tech and more.

AdvantEdge (Fund III)

Early-stage venture capital (VC) fund AdvantEdge unveiled its third fund to invest $80-$100 Mn in mobility solutions companies.

Founded in 2015 by Kunal Khattar, AdvantEdge is an early stage tech fund investing across consumer sectors with a focus on mobility.

The new fund focusses on investing in the electric vehicle (EV) ecosystem with eyes on startups that make EVs affordable. The fund also plans to invest in startups that lease out

Aeravti Ventures

Early stage venture capital (VC) firm Aeravti Ventures announced the first close of its maiden INR 100 Cr fund on May 30,2023. 

Led by General Partners Rishabh Singh and Shubham Jhuria, and supported by over 25 Entrepreneur Partners (EPs), Aeravti Ventures is focussed on investing in new-age technologies and emerging tech startups.

For its maiden fund, Bengaluru-based firm said the fund will invest in pre-seed to Pre-Series A funding rounds of startups in sectors like deeptech, biosciences, agritech, climate, and enterprise tech in the next two to two-and-a-half years. 

Agri-Focused Accelerator Fund

During the union budget speech 2023-24 in February, India’s finance minister (FM) Nirmala Sitharaman announced an agriculture-focused accelerator fund to shore up domestic agritech startups working in rural areas of the nation.

The FM said that the fund targets building innovative and effective agritech solutions for agriculture farmers, in turn, helping them improve access to market linkages and yields. The move is part of this year’s seven-fold approach which aims to give a major push to the Indian economy amid a global slowdown.

Targeted at farmers, the project will support the growth of the agritech industry and startups. It is also envisaged to improve access to farm inputs, shore up credit and insurance, and increase access to market intelligence.

Airavat Global Technology Fund R

Public equities investment firm Airavat Capital announced the launch of a global technology fund, Airavat Global Technology Fund R (AGTF R) in June.

The tech fund has already received interest worth over $40 Mn from investors, including existing stakeholders of Airavat Capital, other VC investors, technology founders/CTOs, and family offices.

Airavat Capital is an investment management firm that is focussed on listed technology-enabled businesses across growing sectors such as consumer, financial services, technology and pharma. It is pertinent to note that it is the first-ever global technology fund to be based out of GIFT City.

Arkam Ventures

Early stage VC firm Arkam Ventures launched its second fund with a target corpus of $180 Mn in June 2023. The fund is nearly double the size of its previous fund, which the VC firm closed last year at $106 Mn.

With its new fund, the VC firm would look to write larger early stage checks to secure a bigger stake in early stage startups.

Typically, Arkam Ventures steps in at the Pre-Series A to Series B stage, with cheque sizes ranging between INR 10-20 Cr.

Arkam Ventures has made 18 investments so far, including names like smallcase, KreditBee, Jar, Smartstaff, Jai Kisan, Signzy, SpotDraft, Wint Wealth, Invact, Mudrex, BestDoc, and Jumbotail.

Avaana Capital

Climate-focussed venture capital firm Avaana Capital raised $70 Mn, announcing the first close of its Avaana Climate and Sustainability Fund in June. The VC firm is targeting a total corpus of $100-125 Mn for the fund.

The fund will focus investments in three sectors, including energy transition and resource management, mobility and supply chains, sustainable agriculture and food systems.

Led by Anjali Bansal, Swapna Gupta, and Shruti Srivastava, Avaana Climate and Sustainability Fund focusses on tech-driven and innovative climate solutions, looking to solve climate risk mitigation, adaptation and resilience building.

B Capital (Growth Fund III)

US-based investment firm B Capital closed its third venture growth fund and allied companion funds, Growth Fund III at $2.1 Bn in January this year. The fund will invest between $40 Mn and $50 Mn in startups across the US and Asia, including India, working in enterprisetech, fintech, healthtech, SaaS and cybersecurity segments.

Founded in 2015 by Howard Morgan, Sheila Patel, Eduardo Saverin and Raj Ganguly, B Capital invests in seed to late-stage startups. It manages nearly $6.3 Bn worth of assets under management (AUM).

The fund will emphasise on value-added investing, accelerating business development and growth of portfolio companies, according to the VC firm.

B Capital (Healthcare Fund I)

VC firm B Capital also closed a Healthcare Fund I at over $500 Mn. The healthcare-focused fund would invest in startups working in digital health and biotech segments. 

Its healthcare portfolio includes more than 20 early and late-stage startups based in the US, Asia and Europe. Its portfolio spans the healthtech, digital health, biotech and medtech segments.

Some of its portfolio companies are Bounce, BYJU’S, Khatabook, Meesho, PharmEasy, Yubi and Dailyhunt.

Blume Continuity Fund

Venture capital (VC) firm Blume Ventures announced the first close of its new opportunity-cum-continuity fund, Fund 1Y, in June. This is the VC firm’s third growth fund.

Blume said in a statement that it already raised INR 200 Cr of the INR 400 Cr target corpus for the round.

The VC firm also added that it would invest a part of the capital raised to buy out strong startups such as IntrCity, Cashify, Carbon Clean and Zopper from its Fund 1 and related investment vehicles and use the remaining to invest in startups from other funds.

Blume also raised similar-sized opportunity funds in 2018, 2021 and 2022 to invest in startups such as Exotel, Grey Orange Robotics, Smallcase, slice, Unacademy and WebEngage.

BoldCap Fund

Indian venture capital firm BoldCap announced a $25 Mn second fund in April 2023 to make investments in 15-20 early-stage SaaS startups in the country in the next 24-36 months.

The fund bets on Indian startup founders having global ambitions. The fund aims to build more SaaS-based companies in India for the world.

Founded in 2021 by Nellore, BoldCap largely invests in pre-seed and seed-stage B2B SaaS startups in India. The VC firm primarily backs pre-seed and seed-stage B2B SaaS startups, which are based out of India.

From its $5 Mn maiden fund, it has backed 10 startups to date, including Spendflo, TestSigma and Spotdraf.

CapFort Ventures

CapFort Ventures, a Micro VC fund, has recently unveiled its new India-focussed tech fund, amounting to INR 200 Cr. Over the next two years, the fund aims to invest in approximately 40  startups.

The firm has a diversified investment strategy, targeting startups from various sectors, including deeptech, cleantech, B2B tech, logistics, healthtech, and other impact-oriented sectors.

As a category II alternative investment fund (AIF), CapFort Ventures will be seeking opportunities to invest in startups with valuations within the range of INR 100 Cr. The ticket size for individual investments is expected to vary between INR 2 Cr and INR 6 Cr, with the average falling around INR 3 Cr to INR 3.5 Cr.

The first close of the fund is anticipated to take place by the end of this year, with further provisions for additional investments through a green shoe option of INR 100 Cr, which will be available if there is considerable interest from potential investors.

The micro VC firm is looking to source a majority of the capital from domestic investors, with participation from institutional investors, family offices, and ultra HNIs. 

Capria Ventures

Global venture capital firm Capria Ventures marked the first close of its $100 Mn fund in April 2023. The VC firm said it will focus on investing in 20-25 tech startups across India, Southeast Asia, Latin America, the Middle East and Africa via its new fund. 

It will focus on startups harnessing the potential of Generative AI to grow across multiple sectors as well as climate startups, the VC firm said. The fund has been anchored by LPs such as OIP Investment Trust and Gates Ventures as well as foundations, individuals and family offices.

Capria’s family of funds collectively manage assets exceeding $200 Mn.

CarTrade Ventures

Auto marketplace CarTrade launched its VC arm, CarTrade Ventures, in February this year to make investments and acquisitions in the Indian automotive space. The new venture will deploy up to INR 750 Cr (around $94 Mn) over the next five years to strengthen its auto-tech play. 

At the fund’s launch, CarTrade said the move will enable it to acquire and invest in companies that offer differentiated services and technology in the automotive space.

CarTrade said it was actively scouting to invest in companies across auto sub-segments, including auto finance, leasing, insurance, servicing, car ownership, electric vehicles and clean energy, along with new-age tech startups in domains such as augmented reality (AR), artificial intelligence (AI) and visualisation, to digitise the auto buying journey.

Chanakya (Opportunities Fund I)

Chanakya Fund Trust launched its maiden INR 100 Cr ($12.5 Mn) sector-agnostic fund in April 2023 to invest in startups and SMEs. The SEBI-registered Category-II alternative investment fund, Chanakya Opportunities Fund I, will also have a greenshoe option of INR 100 Cr. 

The fund will invest about INR 2 Cr-INR 10 Cr each in about 25 companies, raising capital from resident and non-resident Indians, high-net-worth individuals, banks, accredited investors, corporates and trusts.

“Chanakya Opportunities Fund I is our first offering. We are planning to raise INR 100 Cr in the first year. This is a close-ended fund, and we will be accepting subscriptions for the tenure of five years from the first close with a maximum of two extensions of one year each,” said, Kresha Gupta, the founder and fund manager of Chanakya Fund Trust.

Chiratae Ventures (Growth Fund I)

Early stage venture capital (VC) firm Chiratae Ventures announced the final close of its Growth Fund I at INR 1,001 Cr. The fund saw its first close in November 2022, when the VC firm first closed the growth fund at INR 759 Cr.

Founded in 2006, Chiratae Ventures currently manages assets worth $1.1 Bn and is known for backing early stage startups. It has backed 130-plus startups across SaaS, consumer tech, health tech, deeptech, agritech, fintech and other domains.

Chiratae Growth Fund I is a sector-agnostic fund that has been set up to invest in the growth rounds of startups. 

Courtside Ventures (Fund III)

VC firm Courtside Ventures rolled out a $100 Mn fund, the third from the firm, to make investments in startups operating in sports, online gaming and lifestyle segments. 

According to Deepen Parikh, partner at Courtside Ventures, with the fund, the VC firm will continue to invest with conviction in great founders and disruptive ideas in crucial verticals of sports, fitness, collectables and gaming.

The VC firm said that it would onboard a slew of professional sports team owners, athletes and industry executives as limited partners of the fund. So far, it has invested in about 80 startups, including The Athletic, WinZO and FanCraze, across eight countries.

Dallas Venture Capital

VC firm Dallas Venture Capital announced the first close of its INR 350 Cr fund at INR 100 Cr in January this year. The fund will invest between $2 Mn and $5 Mn in 15 to 18 enterprisetech startups over four years.

Speaking with Inc42, Fund Partner at DVC Kiran Kalluri said that the fund was so far operating in stealth mode but has invested in many startups. 

Dallas said that the fund would be largely focused on growth-stage startups earning revenue over $500K. The fund is backed by India and US-based HNIs and institutional investor IIFL. It has backed five Indian startups to date, including Disprz, IntelleWings, VuNet, BluSapphire and Hippo Video.

Early Spring

Early Spring, set up by Spring Marketing Capital, received a commitment of INR 100 Cr from Godrej Consumer Products (GCPL) this April. The new fund has a corpus of INR 300 Cr and will make investments between INR 5 Cr and INR 20 Cr in seed and Pre-Series A funding rounds.

Founded by Raja Ganapathy, Arun Iyer and Vineet Gupta, Spring Marketing Capital closed its first close at INR 150 Cr and continues to invest in companies at the Series A level and beyond.

It has invested in Purplle, Bewakoof, Juicy Chemistry, Smiles.ai and Mosiac Wellness since its inception.

Elev8 Venture Partners

In August 2023, Bengaluru-based growth venture capital firm Elev8 Venture Partners announced the first close of Elev8-Capital Fund 1 at $67 Mn. Family offices and high-net-worth individuals (HNIs) from India, the Middle East, and Asia participated in the first close of the fund.

Elev8 Venture Partners began its operations in early 2023 after receiving AIF category II licence from SEBI late last year.

The VC firm plans to invest in 12-14 startups, with valuations ranging from $100 Mn to $500 Mn. It will be participating in Series B and Series C funding rounds (typically in the range of $10 Mn to $15 Mn) of startups in sectors such as consumer tech, enterprise software, fintech, and healthtech.

Epiq Capital (Fund II)

In June 2023, Mumbai-based growth and late stage tech investment firm Epiq Capital announced the final close of Epiq Capital II at $225 Mn.

Established in April 2016 by former Matrix Partners India managing director Rishi Navani. Epiq Capital’s current portfolio includes eyewear unicorn Lenskart, local language content platform Dailyhunt, and fitness startup Curefit, among others

The fund II will invest in the next Tech Nifty 50 companies, which means, the fund intends to support startups that have the potential to be worth $50 Bn in the next ten years.

The fund II is looking at investing in around ten companies with an average cheque size of $20-25 Mn each.

Grayscale Ventures

Grayscale Ventures made the first closure at $10 Mn of its $20 Mn micro-fund in February 2023, targeting pre-seed startups across sectors such as AI, vertical SaaS and Dev-Infra (development infrastructure).

The VC firm, which was founded by Nikhil Kapur and Siddharth Verma, has limited partners (LPs) from Japan, India and the US. These LPs are operators and founders of Slack, Zendesk, Hasura, GlobalWay, Nexus, STRIVE, Apollo Munich, and UOB, among others.

The micro-VC fund would make investments between $200K and $1 Mn in 15-20 pre-seed startups over four years. It is expected to see a final closure by Q3 2023. Further, the fund will target about 10% ownership in the invested startups, preferring to lead the fundraising rounds or co-lead them with other specialised funds.

GrowthCap Ventures

Pratekk Agarwaal, the former chief business officer at BharatPe, launched GrowthCap Ventures in August 2023. The SEBI-registered Category II alternative investment fund (AIF) plans to invest in 12-15 startups within the next two years.

Agarwaal is looking to raise INR 50 Cr for the fund to fund early stage Indian startups.

GrowthCap Ventures will look at seed to pre-Series A rounds, with a focus on fintech, SaaS and deeptech. The fund, which will invest $250K to $750K in each startup, is expected to mark its first close in the next two months.

Iron Pillar (Fund II)

VC firm Iron Pillar closed a $129 Mn fund in April, which will invest in Series B and Series C stage SaaS startups operating in India. The fund is part of the ‘Iron Pillar Fund II series’ of funds.

Founded in 2016, Iron Pillar offers growth capital and assistance to enterprisetech and consumertech startups to expand globally. It mainly leads Series B and C funding rounds and later doubles down on the breakout businesses with 5X to 10X of its initial investment. 

Its portfolio companies include Uniphore, Servify, FreshToHome, BlueStone, Skill-Lync and Curefoods, among others. The VC firm also claims to be managing $500 Mn in assets under management (AUM).

Lighthouse Canton

Investment firm Lighthouse Canton made the first close at INR 155.4 Cr ($20 Mn) of its INR 550 Cr ($69 Mn) venture debt fund in January 2023. The fund will invest in 35-40 Indian startups over the next two years.

Speaking with Inc42, Lighthouse Canton’s global head of asset management Sanket Sinha said that the fund saw participation from onshore and offshore institutions, family offices and other ultra-high-net-worth individuals (UHNIs). The fund would largely extend debt capital to Indian technology-enabled startups with ‘sound business models and viable unit economics’.

Lighthouse made its wealth management foray into India in 2020 while its India-focussed venture debt vertical was unveiled in 2022. Lighthouse also offers solutions ranging from funding solutions for startups to closely working with the founders on business structuring.

Lumikai

Gaming-focused venture capital (VC) firm Lumikai announced the launch of its second fund in June with a total corpus of $50 Mn. 

The fund raised $25 Mn of the total corpus at the time of the announcement and looks at a closure by the end of the year. 

Founded in 2019 by Justin Shriram Keeling and Salone Sehgal, Lumikai is a VC firm that focuses solely on the Indian gaming ecosystem and largely targets seed stage ventures. 

The fund will be deployed to invest in 18-20 early stage companies over the course of next few years.

MIXI

In August 2023, Japanese mobile entertainment company MIXI announced the launch of a $50 Mn (about INR 414 Cr) corporate venture capital (CVC) fund in India to invest in early stage entertainment and consumer services startups.

The CVC fund will invest in seed to Pre-Series B startups in the country, with a particular focus on Series A and Pre-Series A investments.

Founded in 1997, MIXI has created several communication services since its inception. The company’s investment arm claims to have invested around $492 Mn between FY19 and FY22.

MIXI has an existing CVC fund in Japan and is now looking to expand to markets outside the country. MIXI is one of the limited partners (LPs) in India’s gaming and interactive media venture fund Lumikai.

Multiples PE (Fund IV)

Mumbai-based private equity (PE) firm Multiples Alternate Asset Management announced the first close of its Fund IV in May with a subscription of over $640 Mn.

The fund saw investment from investors such as the Canada Pension Plan Investment Board (CPPIB) and International Finance Corporation (IFC), among others.

Founded in 2009 by Renuka Ramnath, Multiples PE invests in mid-sized companies and growth to late stage startups. A typical Multiples cheque is worth between $15 Mn and $50 Mn. 

Multiples Fund IV is one of the largest funds launched in India so far this year, ‘behind B Capital’s $2.1 Bn Growth Fund III and Nexus Ventures’ $700 Mn Nexus Ventures VII.

Nexus Ventures (Nexus Ventures VII)

VC firm Nexus Venture closed a $700 Mn fund, the Nexus Ventures VII earlier in March this year, to back startups working in AI, SaaS, fintech and commerce in India and the US.

The VC firm said it follows a ‘one fund one team’ approach and will help entrepreneurs build product-first companies in the US and India. 

Founded in 2006, Nexus counts global pension funds, family office and endowment funds as its investors.

It largely invests in tech-enabled startups based in the US and India. Its backers include global pension funds, family office and endowment funds. Some of its portfolio companies are Delhivery, Unacademy, Druva, PubMatic, PostMan, Covvalent, Intello, and Investment.

Omnivore (Fund III)

Mumbai-headquartered venture fund Omnivore announced the first close of its third fund, the Omnivore Agritech & Climate Sustainability Fund, at $150 Mn in June 2023. 

The fund will focus on startups developing breakthrough technologies for agriculture, food, climate, and the rural economy. The fund would make 25-30 new investments in seed to Series A rounds, with initial cheque sizes ranging between $1 Mn and $5 Mn.

Founded in 2011 by Mark Kahn and Jinesh Shah, Omnivore funds Indian startups in agritech and food systems. The VC firm has backed more than 40 startups, including DeHaat, Arya, Stellapps, Reshamandi, Ecozen, Aquaconnect and Pixxel.

Prath Ventures Fund

VC firm Prath Ventures made the first closure at INR 50 Cr ($6.25 Mn) of its INR 225 Cr (around $28 Mn) fund in January 2023. The fund will invest between INR 5 Cr and INR 6 Cr in about 20 startups and will also reserve a portion of funds for follow-on investments.

Set up in May 2022 by Piyush Goenka and Harmanpreet Singh, the VC firm has invested in more than 20 seed and growth-stage consumer brands. As per its website, some of its portfolio companies include PVR Cinemas, MyGlamm, Sanfe, ManMatters, and Vastu, among others.

The VC firm shared that the fund will focus on businesses offering products and services directly to end consumers. It will back consumer-focused startups as valuations are at reasonable levels and companies are now looking at building sustainable ventures.

PeerCapital (Fund I)

VC firm PeerCapital announced the first closure at $37.5 Mn of its $75 Mn maiden fund in February this year. The fund would write off cheques of about $2 Mn in seed and series A-stage funding rounds. PeerCapital aims to back startup founders that are building innovation for India and the world.

The Bengaluru-based VC firm is also an early-stage investor in the likes of investment platform Jar and social media platform Koo. Other than that, the VC firm has also invested in the social commerce platform Furrl, virtual and secondary phone numbers services provider Doosra and cloud-based workplace management software UrSpayce.

The fund will focus on startups operating in fintech, healthtech, enterprisetech, climate tech and consumer tech segments. It is expected to make a final closure by September 2023.

Physis Capital

Venture capital (VC) firm Physis Capital announced the first close of its maiden Category II Alternative Investment Fund (AIF) in May at $7 Mn. The VC firm said the fund’s total corpus was capped at $50 Mn and it targets to close the fund in 2024.

Angel investment platform Inflection Point Ventures (IPV) launched its new $50 Mn fund, Physis Capital, last year to promote startups raising early capital.

Physis Capital is looking to build a portfolio of 15-20 startups with an average ticket size of $2.5 Mn via the sector-agnostic fund.

Pi Ventures

Early-stage VC firm Pi Ventures announced the final close of its second fund with a total commitment of INR 702 Cr ($85 Mn) in August against its base target of INR 565 Cr.

Founded in 2016 by Manish Singhal, Pi Ventures closed an INR 225 Cr first fund (Fund I) in 2018. With its first fund, it backed 15 deeptech startups, including Niramai, Pixis, Wysa, Agnikul, and Locus, just to name a few.

The VC firm’s second fund, which was launched in 2021, has received investments from BII, Nippon India Digital Innovation AIF, Flipkart founder Binny Bansal, Mamaearth founder Varun Alagh, Info Edge CEO Hitesh Oberoi, MakeMyTrip founder Deep Kalra, Accel, and other high-net-worth individuals and family offices.

Piper Serica Advisors (Angel Fund)

Portfolio management firm Piper Serica secured INR 75 Cr for its INR 100 Cr angel fund in January this year. The fund, which was launched last year, focuses on early-stage tech startups. In a statement, the company said that it expects to raise the remaining INR 25 Cr shortly to invest in startups with ‘exponential growth models’.

Piper Serica said it was using its proprietary AI, ML-based tool, Yoda.ai, to screen investment opportunities. It informed that it would back a supply chain management startup, a CRM tech startup, a cybersecurity company, and a learning management solution company.

So far, the fund has backed ALT Mobility, Crediwatch, ZFW Dark Stores, Driffle and Oditly.

Rockstud Capital (Investment Fund II)

In March 2023, asset management firm Rockstud Capital rolled out an INR 300 Cr ($36.4 Mn) second fund, the Rockstud Capital Investment Fund II, to make investments in 25 Indian startups operating in the digitalisation, sustainability, financial inclusion, consumption and health sectors.

The parent firm Rockstud Capital, which was founded in 2017, has backed multiple companies so far, including Everest Fleet, BigHaat, Instoried, Smartvizx, Fabheads, and NOTO.

The fund will make investments between INR 1 Cr and INR 10 Cr in Pre-Series A and Series A funding rounds.

RTP Global

Early stage venture capital (VC) firm RTP Global announced its RTP IV fund in June 2023 with a corpus of $1 Bn to invest in startups across the US, Europe and Asia.

The $1 Bn fund will be split into two parts – while $660 Mn will be earmarked for its early stage investments, $340 Mn will be infused in RTP IV’s ‘breakout’ portfolio companies.

RTP Global will reserve one-third of the corpus for investing in startups in India and Southeast Asia. RTP Global has so far invested in over 30 Indian startups and counts Indian startups like CRED, Rebel Foods, and MPL its portfolio company.

Speciale Invest (Growth Fund I)

VC firm Speciale Invest launched its INR 200 Cr growth fund, Speciale Invest Growth Fund I, in April 2023,  with an additional up to INR 100 Cr in greenshoe. The VC firm said it would close the fund in the coming months.

The VC firm will use the capital to fund portfolio companies working in spacetech, green hydrogen, robotics, green mobility, quantum tech and AI-led platforms, among others. Speciale has backed 18 companies via its first fund and plans to invest in 20-22 early-stage companies with its second fund.

Founded in 2017, Speciale Invest largely invests in early-stage startups from emerging areas such as deeptech, AI-led SaaS, robotics, micro-electronics, and spacetech.

Stride Ventures (Fund III)

Venture debt firm Stride Ventures announced the first close of its third venture debt fund in May at $100 Mn. It is aiming for the final closure of the fund at over $200 Mn.

Stride Ventures said the fund will make investments in fast-growing startups that exhibit robust business models, strong unit economics, and skilled management teams.

Set up in 2019, Delhi-based Stride Ventures is led by Ishpreet Gandhi and Abhinav Suri. So far, the fund has invested in over 100 startups across sectors such as consumer internet, SaaS, fintech, and B2B platforms. 

The Neon Fund

The hosts of the 100x Entrepreneur podcast (now called The Neon Show), Siddhartha Ahluwalia and Nansi Mishra launched a $25 Mn fund, Neon, in July.

Neon fund will focus on early stage B2B SaaS companies and aims to help them to scale to more than $10 Mn in annual revenue within five years.

Ahluwalia and Mishra’s previous $10 Mn fund, 100x Entrepreneur, invested in over 40 B2B SaaS startups, including Airmeet, Astra Security, CloudSek, InFeedo, KNOW app, Profit.co, Phyllo, and SpotDraft.

Together Fund II

In late July, Bengaluru-based Together Fund announced the first close of its $150 Mn second early stage fund, Together Fund II, which is focussed on SaaS and AI startups.

Together Fund II will invest $1 Mn-$5 Mn in seed and Series A rounds of startups.

The VC firm was launched by Girish Mathrubootham, the founder and CEO of Freshworks, Eka Software’s founder and CEO Garg, ex-Matrix Partner Shubham Gupta, and Avinash Raghava, an ex-Accel executive. Kula, Privado, Revenue Hero, Spendflo, Spry, and Toplyne are among the portfolio startups of Together Fun.

Unitus Ventures (Opportunity Fund)

VC firm Unitus Ventures marked the first closure of its $40 Mn Opportunity Fund in February this year. The fund will largely back early-stage startups from its portfolio of other two funds viz. Unitus Ventures Fund I and Unitus Ventures Fund II.

The investment firm would also set aside 20% of the fund amount for deals outside of its existing portfolio to focus on Series A startups working in AI and climate tech segments. It also plans to do a final closure of the fund by the end of this year. 

So far, the fund has pumped money into five startups, including HRtech platform BetterPlace, edtech startup Cuemath, lendingtech platform Eduvanz, gig worker platform Awign and upskilling company Masai.

V3 Ventures

Early-stage VC firm V3 Ventures shared plans of investing about INR 900 Cr in startups operating in India, Europe and the US in April. 

The fund, which is backed by international investment company Verlinvest, will focus on early-stage digital and consumer businesses across new-age brands, technology, enablers and platforms at seed and Series A stages. 

Founded in 2021 by Arjun Vaidya and Lopo Champalimaud, V3 Ventures can leverage the global investment company’s network of partner companies, teams and advisors. So far, V3 Ventures has backed the audio content platform Kuku FM and digital healthcare app Eka Care in the country.

Varanium Capital 

Mumbai-based asset management company Varanium Capital announced the first close of its maiden venture debt fund in July 2023, which has a target corpus of INR 250 Cr, with a greenshoe option of INR 50 Cr.

Varanium Capital has secured the backing of domestic and global LPs, along with an anchor investor for the venture debt fund.

The firm said it will back around 100 startups in India via revenue-based financing and traditional venture debt.

Veda VC

Bengaluru-based early stage venture capital (VC) fund Veda VC announced the first close of its INR 250 Cr fund in August 2023, led by family offices and startup CXOs.

Founded in 2020 by Vasant Rao, Avijeet Alagathi, Venus Dhuria and Ashis Nayak, Veda VC claims to be one of the first operator VCs in India. Besides capital, the team at Veda brings domain knowledge, ecosystem network, execution skills and craft to help portfolio companies reach PMF, scale faster and raise follow-on capital.

The SEBI registered Category 1 AIF fund plans to invest between $250K to $1.25 Mn in technology and tech-enabled startups in India.

Vertex Master Fund III

Vertex Ventures, the venture capital arm of Singapore’s state investor Temasek, marked the first close of its latest fund, Vertex Master Fund III, at around $900 Mn. Set up in 2021, Vertex Master Fund III closed its first round at the end of June 2023.

The VC firm, which has invested in 71 startups so far, has backed big Indian startups like Licious, Firstcry, XpressBees, Grab, Kissht, and Kuku FM.

Vertex debuted in India in 2010 with India and Southeast Asia Fund. Over the last decade, it has dedicated four funds to investing in the region. 

ValueQuest Investment Advisors (VQ Scale Fund)

Private equity (PE) firm ValueQuest Investment Advisors rolled out a $121 Mn fund (VQ Scale Fund) to back late-stage startups in March this year. Through its new fund, ValueQuest will invest primarily in late-stage opportunities. 

The fund will have a target size of INR 700 Cr. There is also a green shoe option of INR 300 Cr, which would potentially take the total fund size to INR 1,000 Cr. 

The VQ Scale Fund was sponsored by ValueQuest founder and CIO Ravi Dharamshi, while Dharamshi’s family office anchored it with an investment of INR 100 Cr. It also received commitments from Indian family offices.

WinZO (Game Developer Fund IV)

Gaming startup WinZO rolled out the fourth edition of ‘Game Developer Fund’ in March this year. The $50 Mn fund would make investments of up to $10 Mn in a gaming startup. It further plans to invest as much as $10 Mn in US-based gaming startups.

Founded by Nanda and Saumya Singh in 2018, WinZO is an online skill-based gaming startup that associates with third-party developers to host games on its mobile-based application.

In 2021, WinZO launched the third edition of the gaming-focused fund, having a corpus of $20 Mn. Under these funds, WinZO has backed several gaming companies to date, including the likes of Upskillz, IndiGG and Bombay Play, among others.

Women Entrepreneurs Early Growth Fund

Early stage venture fund AWE Funds revealed the first close of its maiden fund in India, the Achieving Women Entrepreneurs Early Growth Fund I, at $15 Mn in June this year.

AWE Funds is targeting a corpus of $45 Mn for the fund, with a greenshoe option of $15 Mn. The early stage venture fund typically invests in Pre-Series A and Series A rounds, mostly post-revenue companies

The fund aims to invest in scalable innovations in sectors such as climate tech, agritech, healthtech, edtech and fintech while promoting gender equity and climate action as a strategy.

Z3Partners

VC firm Z3Partners marked the final closure at INR 550 Cr (around $69 Mn) of its fund in January 2023. The fund was backed by institutional investors like HDFC Life and SIDBI.

Founded in 2019 by Gautam Patel, the VC firm will invest between INR 50 Cr and INR 80 Cr in 8-10 early and growth-stage tech startups working in SaaS, fintech, ecommerce, B2B commerce, agritech, big data, consumer tech and tech-enabled segments. 

Back in 2021, Z3Partners raised INR 100 Cr, marking the first close of its maiden fund with a target corpus of INR 730 Cr ($100 Mn) targeting high-growth startups across consumer and enterprise sectors.

Zero To One

Investment firm Zero To One (ZTO) has announced an INR 300 Cr (about $48 Mn) fund in January 2023 to make investments in Pre-Seed and Series A funding rounds. The fund focuses on Indian startups operating in edtech, healthtech, agritech, medtech and cleantech segments. 

Founded in May 2022 by Praveen Kaushik and Rahul Massey, ZTO claims to have a network of more than 500 angel investors, HNIs and VCs across India, Singapore, Dubai, the US and the UK.

The VC firm said its screening mechanism assists in identifying startups for investments. It also provides investors with a syndicated platform to share their risks and diversifies their portfolios to get maximised returns.

(Last updated on August 31)

The post Funds Worth $3.8 Bn+ Announced For Startups In 2023; Here’s The Full List appeared first on Inc42 Media.

The Ministry of Electronics and Information Technology (MeitY) is all set to host the maiden edition of the Global IndiaAI 2023 summit in October. 

The conference aims to spur investment opportunities in the country’s AI startup ecosystem and nurture talent.

The event is expected to see participation from both global and domestic artificial intelligence (AI) platforms, researchers, startups, and investors. 

In a statement, the ministry said that the summit will cover a wide spectrum of topics, allowing all major stakeholders to deliberate on the future of AI and its impact on India Inc.

“The Global IndiaAI 2023 conference is tentatively planned for October 14/15 and it will bring together the best and brightest in AI from India and around the world… The Global IndiaAI summit will also catalyse India’s AI landscape and innovation ecosystem,” said Minister of State (MoS) for Electronics and Information Technology Rajeev Chandrasekhar. 

As per the ministry, the event will centre around emerging areas in the AI space, including next-generation learning and foundational AI models, future research trends and AI computing systems. In addition, stakeholders will also deliberate the application of AI in areas such as healthcare, governance and next-generation electric vehicles.

With this, the government wants to emulate the ‘huge success’ of the SemiconIndia summit held in July this year and catalyse the local AI industry. 

As per an official statement, the event will showcase the state-backed IndiaAI ecosystem that comprises projects such as the Digital India Bhashini India Datasets Program and IndiaAI Future Design Program for startups.

Chandrasekhar is chairing the steering committee that has been given the task of organising the Global IndiaAI 2023 summit. The panel comprises members from MeitY’s Digital Economy Advisory Group and other industry experts in the field of AI.

Lauding the role of startups and academia, Chandrasekhar said that a holistic framework developed in partnership with stakeholders for the IndiaAI initiative will serve as an integral part of the upcoming conference’s agenda. He also called for the responsible use of AI to curb user harm and encourage innovation. 

“… What we want is that AI should be responsible so that user harm is curbed and innovation is encouraged. Our primary aim is to ensure a collaborative and participatory approach, steering AI to enhance governance and transforming lives while building global partnerships and actively shaping the world’s technology landscape,” the MoS said. 

This comes days after Prime Minister Narendra Modi called for building a global framework on the ethical usage of AI while addressing the B20 Summit India 2023. 

Not just this, industry veterans, such as Sridhar Vembu, have also raised concerns over the emerging technology, while Tata Sons’ chairman N Chandrasekaran has expressed optimism over the positive impact of AI on the job market in India.

The post With AI Startups At The Core, India To Host Maiden Global IndiaAI 2023 Summit In October appeared first on Inc42 Media.

The government-backed Open Network for Digital Commerce (ONDC) has scaled up the number of restaurants on the platform to 50,000.

The platform had only 500 restaurants in February, which has now grown exponentially to 50,000 restaurants across 172 cities, ONDC said in a statement.

It said it aims to double the restaurant count on the platform by the end of 2023.

On the seller side, network participants (NPs) include big names such as Magicpin, uEngage, Bitsila, EkSecond, Growth Falcons, Mystore, nStore, and eSamudaay. 

“This remarkable milestone is a testament to our team’s dedication and the invaluable support of our NPs. What started with our first order in Sept’ 22, the network has onboarded over 50,000 restaurants till now!” said ONDC managing director (MD) and chief executive officer (CEO) T Koshy.

Since its inception in December 2021, ONDC has been working on establishing open protocols for all aspects of digital commerce, allowing buyers and sellers to use any compatible application or platform to conduct transactions. It aims to break silos of multiple ecommerce platforms and unify them with a single, open network.

On the food delivery side, the state-backed platform competes with giants like Swiggy and Zomato.

While ONDC onboarded its first restaurant back in May 2022, it processed the first order months later in September, 2022. Since then, it has rapidly expanded its beta trials in multiple cities, including Delhi NCR, Mumbai, Chennai, among others.

Consumers can place food orders on ONDC through buyer apps, including Paytm, Pincode, Magicpin, and Mystore. 

ONDC has also been experimenting with multiple sectors and segments from grocery delivery to fintech. It also surpassed the 35,000 daily retail orders mark last month.

The post Threat To Zomato, Swiggy? 50,000 Restaurants Now Live On ONDC appeared first on Inc42 Media.

Japanese conglomerate SoftBank has made more than $5.5 Bn in exits from its India portfolio since it began operations in November 2018 in Mumbai, said Sumer Juneja, the firm’s managing partner and head for Europe, the Middle East and Africa.

In a recent interview with Mint, he stated that the late stage investor has realised $1.5 Bn from exits in the past 12 to 18 months. Additionally, he mentioned that another $1.5 Bn is liquid and held in tradable equities.

According to Juneja, SoftBank is expected to have one to two annual exits in India. Recently, the Japanese investment major has made partial exits from unicorns such as Lenskart and FirstCry and booked profits from listed startups Paytm, Zomato, Delhivery and Policybazaar. In fact, in its Q1 FY24, the four startups contributed gains of $400 Mn to SoftBank Vision Fund 1.

However, the investment firm’s biggest exit remains from Flipkart in 2018, where it sold its 20% stake in the ecommerce giant to Walmart for around $4 Bn. SoftBank rejoined Flipkart’s captable in 2021, as part of a $3.6 Bn funding round.

Overall, the Japanese investment giant has invested around $15 Bn in India since 2011. It has put in around $11 Bn through its vision funds since 2017. “Our thesis in India is that we will invest in companies at $1 Bn – $2 Bn valuation and exit at the $5 Bn – $6 Bn valuation mark,” Juneja said.

SoftBank will see more exits in the near future, with its portfolio companies such as FirstCry, Lenskart, OfBusiness, Swiggy, Icertis, and Ola Electric likely to go public. However, Juneja noted that predicting the timing of these public offerings is challenging due to market volatility and the upcoming 2024 general elections.

SoftBank’s Shifting Stance

The Japanese investment major turned into a ‘defensive mode’ in May 2022, after markets collapsed in the aftermath of Russia’s invasion of Ukraine. More than a year later, Vision Fund I and II clocked a $1 Bn investment gain after six straight quarters of losses. 

Being one of the most active unicorn backers with 22 Indian unicorns in its portfolio, SoftBank has slowed down its Indian investments over the years. In 2021, the VC invested over $3 Bn across 17 deals. In stark contrast, it participated in just four rounds in 2022.

In July, SoftBank founder Masayoshi Son told investors that it was moving to the offensive and was keen to lead the AI revolution.

“Masayoshi Son has been talking about AI since 2017. However, the use of AI has become more sophisticated. If it is not a very high-tech team and product team that can use AI, then we will not invest in them,” said Juneja.

He added that the firm spends an inordinate amount of time on companies to assess if they have the right tech team, product team and DNA to build an AI-first business.

The post SoftBank’s Indian Portfolio Yields $5.5 Bn In Exits Since 2018 appeared first on Inc42 Media.

India has 759 Mn internet users, a number that is set to rise to 900 Mn by 2025. The large number of Indian internet users, along with some of the cheapest internet rates in the world, has given many consumer internet services companies a massive boost.

As a result, India has become the world’s largest consumer internet market for tech giants like Meta and Google, as per Inc42’s “The State of Indian Startup Ecosystem Report 2023”.

Data collated from multiple primary and secondary sources to analyse the top seven internet platforms shows that six of them — Facebook, Instagram, WhatsApp, Snapchat, Google and YouTube — have India as their largest user base.

However, X (formerly Twitter) stands as the only exception, as the US (95.4 Mn users) and Japan (67.5 Mn users) have more users on the platform than India.

At a time when India is the biggest user base for most of the aforementioned platforms, they have been quick to cater to the needs of Indians and consequently reap rewards.

Embracing Diversity

In India, where only around 20% of the population speaks English, the consumer internet platforms that have recognised the potential of regional languages have done better than their peers.

Meta, for instance, was among the first companies to introduce its platforms in many regional languages of the country. Facebook hosts 10 languages on the platform, including Hindi, Punjabi, Urdu, Tamil, Telugu, Marathi, Gujarati, Bengali, Kannada and Malayalam. 

The same is the case with Instagram and WhatsApp, which allow hundreds of millions of users to use these platforms in their respective languages.

Google and YouTube are also available in several regional languages. However, their extensive proliferation in the Indian market comes from the fact that most of India’s smartphone users use Android-powered devices.

According to recent industry statistics, more than 95% of smartphones in India are powered by Android. Since Google and YouTube come baked into these smartphones, the Alphabet-owned platforms potentially have access to 95% of India’s smartphone users.

As for Snapchat and X, most of their user base comes from urban India. As a result, there is a wide gap in absolute numbers compared to other platforms.

While X’s India user base currently stands at 35 Mn, Snapchat has 200 Mn Indian users, which is nearly twice the size of its second-biggest user market, the US (with 108 Mn users).

While these tech giants have been massively successful in India due to their increasing adoption of Indian context, languages and nuances, there is also an element of competition or the lack thereof. 

There are currently no Indian counterparts to the likes of Facebook, Instagram, WhatsApp or any of the tech giants listed here. Incidentally, while Koo has been positioned as a competitor for X (Twitter), the difference in scale is too vast for the Indian startup to meaningfully challenge the Elon Musk-owned platform at present.

India’s consumer internet opportunity is set to reach a whopping $1.6 Tn by 2025, per Inc42 estimates. Given that a major chunk of this opportunity lies with the non-English-speaking parts of the country, many startups have already started leveraging regional languages to grow deeper into this market.

While startups today face some optimisation and contextual challenges, we must not forget that these solutions will only get better with technologies `like AI and ML, and growing feedback from the country’s internet-guzzling netizens.

The post Dominating The Digital Space: How India Emerged As A Key Market For Tech Giants appeared first on Inc42 Media.

India’s booming startup landscape comprises over 90,000 startups, with only 10% securing funding. A majority of founders have to approach over 12 VCs resulting in them spending over 33% of their bandwidth on these efforts.

To address this challenge, we have identified common fundraising mistakes and good practices to improve the chances of securing funding and avoiding pitfalls. Ultimately, fundraising is both an art and a science.

When To Raise, What To Raise

Timing is of the essence while fundraising. When you need money, many investors may not be interested in investing. However, when you don’t need money, you can raise funds on your terms, without the pressure of urgency.

Sticking with the timing aspect of fundraising, the process takes time, sometimes even 12-18 months, and it is essential to budget for it and start early. Planning ahead will ensure that you have sufficient time to communicate your vision and business plan to potential investors and secure funding.

With the right funding, a startup can disrupt the competition, change its orbit and gain dominance in its market. Therefore, the stage and type of fundraising often dictate the fate of a startup. For example, raising a Series A/B without any early indication of product-market fit (PMF) can be detrimental to a company’s success. In such cases, opting for a Seed or Angel round would be a more suitable alternative.

Factors To Consider While Fundraising

First and foremost, it is important to understand your customer’s perception of your product in the market, as well as your strengths. Keeping a close eye on competitors can help a startup refine its positioning and communicate its unique value proposition to investors more effectively. 

Investors often evaluate numerous startups across multiple sectors, therefore, it is essential to identify your moat or unfair advantage over peers and articulate it clearly in your story and positioning.

Choosing an investor is like choosing a life partner. Maximum success is achieved when the minds of the founder and investor meet for a common vision. Occasionally, the match may not be perfect, however, it does not imply that the founder or the investor is inadequate. 

Speaking to other founders for feedback, tracking deals done by a VC and learning about their investing ethos are basic diligences that a founder should do ahead of the fundraising.

Once you have shortlisted a few VCs, wooing them even at the expense of valuation, effort, or time, is worth it. Working on feedback received by investors and sharing periodic updates on your progress are some examples of how you can engage effectively. 

Remember, VCs are equally keen on chasing like-minded founders and many times need that comfort which is possible through effective communication.

Sizing the market is critical, and it is essential to have a clear understanding of your TAM, TOM and SOM. Without this understanding, even remarkable products/brands often encounter difficulties when attempting to expand. 

The Importance Of Telling A Good Story

The importance of storytelling cannot be overemphasised. A typical VC evaluates 3-5 deals every day and the hit rate is usually less than 1%. A useful exercise is to try explaining your business to your friends or family – if you can convey your message to them effectively, then you likely have your story and logic in order.

Early stage startups have limited resources at disposal. In order to get the most out of these resources, it is important to focus and prioritise excelling in one area rather than being a jack-of-all-trades and master of none. 

Pitching shifts the focus from the sheer ‘quantity of revenue’ generated to the ‘quality of revenue’ and unit economics. For example, a company with 10 SKUs selling in a few markets via few distribution channels is far better than growing faster with 100 different SKUs or channels.

These tips can help craft a winning pitch and steer the startup towards securing timely capital and sustainable business growth.

The post Mastering The Art Of Fundraising: Tips For Raising Your Startup’s First Institutional Cheque appeared first on Inc42 Media.

Indian new-age tech stocks largely witnessed a northbound movement this week despite the weakness in the broader domestic equity market.

Twelve out of the 16 new-age tech stocks under Inc42’s coverage gained in a range of 0.2% and over 7% this week, while EaseMytrip emerged as the biggest winner with 7.3% gain on the BSE.

Other gainers of the week included MapMyIndia (jumped 7.1%), Paytm (up 4.6%), CarTrade Technologies (up 3.8%), Nykaa (rose 2.8%), and Zomato (up 1.7%).

Meanwhile, Delhivery, IndiaMart, ideaForge, and Tracxn were the only losers this week, declining between 1% and 4% on the BSE.

In the broader market, Sensex fell 0.1% to 64,886.51 while Nifty 50 declined 0.23% to 19,265.8 this week. The indices fell sharply in two consecutive trading sessions on Thursday and Friday, largely due to the weakness in global markets.

“Markets tumbled sharply tracking weak global equities, as rapidly-rising bond yields continue to weigh on the sentiment. Bets for more Fed rate hikes continue to boost bears’ confidence ahead of Jerome Powells’ speech at the annual Jackson Hole Symposium event,” said Prashanth Tapse, senior VP (research) at Mehta Equities.

Tapse sees a possibility of a massive sell-off in the domestic market amid deteriorating technical and fundamental catalysts that are denting sentiments.

The market is also expected to react to the upcoming annual general meeting of Reliance Industries on (August 28). 

Besides, India’s Q2 GDP and Purchasing Managers’ Index (PMI) data in the coming week, along with cues from China, foreign investor activities, and fluctuations in the dollar index and US bond yields, will play a pivotal role in shaping market dynamics throughout the week, said Santosh Meena, head of research at Swastika Investmart. 

Now, let’s take a detailed look at the performance of some of the new-age tech stocks this week.

The 16 new-age tech stocks under Inc42’s coverage ended the week with a total market capitalisation of $36.36 Bn as against $34.45 Bn last week.

Ant Group Offloads 3.6% Stake In Paytm

Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares or 3.6% stake of Paytm worth over INR 2,037 Cr on Friday.

The latest share offloading came shortly after Antfin transferred 10.3% Paytm stake to founder Vijay Shekhar Sharma’s Resilient Asset Management via an off-market transaction.

At the end of the June quarter, Antfin held 15.09 Cr shares or 23.79% stake in Paytm.

Paytm shares saw a major jump mid-week, however, it ended Friday’s trading session in the red at INR 899.3 on the BSE. Overall, Paytm shares rose 4.6% this week.

It is pertinent to note that Paytm also published its annual report for FY23 this week in which CEO Sharma informed stakeholders about the company’s intention to disrupt the small mobile credit market in the country.

“By helping enable digital loan collection on app, we are now creating a small revolution for financial inclusion, where a loan of as small as a few hundred rupees can be disbursed and collected at very minuscule cost,” Sharma said.

Following a significant rally in its shares in the last few months, the shares of the fintech major have gained almost 70% year to date (YTD).

Rupak De, senior technical analyst at LKP Securities, said Paytm is currently in an uptrend and the support for the stock is at INR 880.

“If it sustains above INR 880, then the uptrend might continue. Else, there could be some consolidation,” De said, adding that the overall trend is sideways to positive.

The target for the stock in the medium term is INR 1,160 and it is INR 1,000 for the short term, he said.

EaseMyTrip Biggest Winner

After a significant downfall since last month, shares of traveltech giant EaseMyTrip regained momentum this week. Its shares jumped 7.3%, ending Friday’s session at INR 40.1 on the BSE.

It is pertinent to note that EaseMyTrip was the second-biggest loser among the new-age tech stocks last week, with its share nosediving 7.5%. Its shares were largely hurt by Q1 results where it reported a decline in profit.

However, this week, the stock gained in three consecutive sessions to emerge the biggest winner.

LKP Securities’ De said that the stock is facing a near-term resistance at INR 42, which, if cleared, would make it rally towards INR 48 in the short term.

EaseMyTrip’s support lies at INR 38, he added.

While most of the new-age tech stocks have bounced back this year after the sharp falls in 2022, shares of EaseMyTrip are trading 24% lower YTD.

Zomato’s Monetisation Experiments 

Almost a month After Zomato started levying a platform fee of INR 2 per order for select users, the foodtech major increased the fee to INR 3 for some users in Tier II cities this week.

While the fee was initially levied only on select users, the company told Inc42 that it would ultimately be applicable to all customers. However, the development is currently in the experiment stage.

It must be noted that Zomato has been trying and testing different ways to increase its revenue. It also became profitable in the June quarter of FY24.

Meanwhile, the lock-in period for investors who received Zomato shares following the Blinkit deal in August last year ended this week. As per reports, SoftBank is now looking to offload its shares in the company via block deals and book profit.

Shares of Zomato slumped 3% on Friday alone, ending the week at INR 90.94 on the BSE. However, the shares gained 1.7% this week.

The current support for the stock is at INR 88, said LKP Securities’ De. Till the time Zomato manages to sustain above this level, there is a chance that it will move towards INR 108-INR 110 in the short term.

However, if the stock goes below INR 88, it could tank further till INR 82, De added.

The post New-Age Tech Stocks Shine Amid Broader Market Weakness; EaseMyTrip Biggest Winner This Week appeared first on Inc42 Media.

The startup ecosystem in India has experienced a significant funding resurgence this week, following its lowest weekly funding levels since 2020. 

From August 21 to 26, Indian startups collectively secured $231 Mn across 16 deals, marking a staggering 5,151% increase compared to the previous week’s modest $4.4 Mn raised over seven deals. 

This week also put an end to an 11-month dry spell without a new unicorn, as Zepto secured $200 Mn in a Series E round, becoming the first startup of 2023 to achieve a billion-dollar valuation. We had previously reported that Zepto was on track to enter the exclusive unicorn club last month.

Funding Galore: Indian Startup Funding Of The Week [Aug 21 – Aug 26]

Key Startup Funding Highlights Of The Week

• Quick commerce startup Zepto raised $200 Mn in a Series E round from StepStone Group, Goodwater Capital, making it the biggest fundraise of this week.
• This week, the consumer services sector secured $200 Mn in funding across two deals, making it the most funded sector. 
• Ecommerce emerged as the frontrunner with the highest deal count, securing $13.1 Mn across five deals.
• After recording a low of $1.9 M in seed funding the seed funding rose to $14 Mn.
• This week, Nexus Venture Partners was the busiest investor as it participated in two deals. 

Other Major Developments From This Week

• Tata-owned watchmaking giant Titan acquired an additional 27.18% stake in omnichannel jewellery startup CaratLane for a sum of INR 4,621 Cr, thus valuing the startup at around $2 Bn. This acquisition will result in Caratlane employees receiving INR 340 Cr to INR 380 Cr from ESOP buyback.
• Bengaluru-based early stage VC – Veda VC announced the first close of its INR 250 Cr fund led by family offices and startup CXOs. It will invest in technology and tech-enabled startups.
• Japan’s SoftBank has sold INR 435 Cr worth of its stakes in FirstCry to Manipal Group’s Ranjan Pai’s MEMG Family Office, Marico’s Harsh Mariwala’s investment office Sharrp Ventures and the DSP family office of Hemendra Kothari. 
• Westbridge Capital picked majority stake in digital investment platform FundsIndia for an undisclosed amount.
• According to media reports, PharmEasy is raising INR 3,500 Cr through a rights issue to repay a large portion of its debt to Goldman Sachs.
• Qatar Investment Authority is investing INR 8,278 Cr ($1 Bn) into Reliance Retail Ventures Limited (RRVL) for 0.99% stake.
• Ahead of IPO, Mamaearth is raising about $120 Mn – $150 Mn in a new funding round at a valuation of $1.5 Bn. The unicorn is in talks with SoftBank, Singapore’s GIC, Qatar Investment Authority, and Fidelity Investments for this fundraise.

The post From Zepto To GradRight — Indian Startups Raised $231 Mn This Week appeared first on Inc42 Media.

With an aim to have 500 startups in its portfolio in the next 2-3 years, homegrown early stage venture capital firm 100X.VC has its eyes set on signing 100 startup funding deals this year, Ninad Karpe told Inc42 in an exclusive interaction on the sidelines of the MoneyX conference that was held last month.

100X.VC, a sector-agnostic VC investment firm, typically invests in early stage ventures and writes small cheques on the lines of the US-based startup accelerator, Y Combinator.

The investment in early stage startups is converted into equity when they raise Pre-Series A or Series A funding. The funding happens through an instrument called iSAFE (Safe Agreement for Future Equity) notes.

Karpe credits his firm for introducing this concept to the Indian startup ecosystem and is not pioneering the show. The instrument has now been adopted by many early stage venture capital firms. According to Karpe, this investment process usually restricts investors from having a seat on the board and curbs the time of the deals that take months to close, like in the case of conventional startup funding.

Founded in 2019, 100X.VC is a SEBI-registered fund, which is led by angel investor Sanjay Mehta’s family office, Mehta Ventures.

Speaking on a range of topics, from funding winter to corporate governance issues plaguing the world’s third-largest startup economy, Karpe outlined that neither there is a dearth of deals nor investors looking to place their bets. However, founders today need to get their act together in striking a balance between dos and don’ts while sitting on heaps of investor capital.

Edited excerpts…

Inc42: What impact has the ongoing funding winter had on 100X.VC’s investment strategy?

Ninad Karpe: Funding winter is a big word. It is all-encompassing, but, if you come down the ladder and slice and dice, there is no winter in some cases.

As early stage investors, we get 25,000 to 30,000 pitch decks every year. While, on the one hand, there is no dearth of deal flow, on the other hand, there is no shortage of interest from angel investors to invest in the early stage.

Also, we are witnessing greater interest from a lot of individuals who are willing to take high risks with small ticket sizes, which is a good sign. Another positive development is that we are seeing a lot of founders emerging from Tier II and Tier III cities, which has only added to the deal flow.

So, when we talk about the funding winter, the pressure is more at later stages, Series C, D, E, and so forth. However, we provide bigger VCs a solid pipeline of startups to invest in for the next 3-5 years, and by then we believe any remaining traces of the funding winter will subside.

Inc42: So, according to you there is no funding winter right now?

Ninad Karpe: I think the exuberance is gone and reality has struck, and this is both from the perspective of founders and VCs.

I think we are at the fag end of the funding winter. In the next couple of months, we should start seeing more and more funds where people are more realistic about everything, sans the blind chase for startups or ideas.

The Indian VC ecosystem is still nascent compared to the West. There is a lot more headroom for a country of our size, and we can easily grow a hundred times from where we stand today.

Inc42: How many number of deals have you closed this year?

Ninad Karpe: While we have already closed 47 deals so far this year, we intend to do 100 deals in 2023. As of now, we aim to close 30-40 deals, however, the range could vary between 80 and 110 deals. Notably, these will be the startups from the 30,000 pitch decks that we have received this year alone.

Inc42: Is there any corpus that 100X.VC has built to invest in startups?

Ninad Karpe: So, we want to keep investing. We are the first institutional cheque writers, and we want to continue with this philosophy. Within the ecosystem, founders know that 100X.VC signs the first institutional cheque by deploying founder-friendly, agile funding instrument iSAFE notes, which we have pioneered in India. So, we want to continue doing this.

Inc42: Are you looking at any specific industry vertical to invest in this year?

Ninad Karpe: Given that we are sector agnostic, we look at groundbreaking ideas, which don’t get funded by anyone else.

Inc42: What is 100X.VC’s exit strategy? Is there any timeline that you set?  

Ninad Karpe: Since we are the first cheque writers, we take a more patient approach. Realistically speaking, I don’t think that we will get an exit within five years from our investments. Given that our fund is only four years old, we haven’t had any major exit yet. However, we expect some good news in the next 1-2 years.

During the pandemic, our investment slowed down, but we are back with a bang, and we want to invest in a hundred startups every year. Hopefully, we will have 500 startups in our portfolio in the next 2-3 years.

Inc42: How have the recent issues around corporate governance that cropped up at several big Indian startups impacted your strategy or relations with your portfolio companies?

Ninad Karpe: Corporate governance is an issue that needs to be fixed. It has happened in some cases due to various reasons.

At 100X.VC, we don’t take any board seats as a VC, however, we have now started including a separate session on corporate governance and its importance before investing.

Corporate governance issues that have recently cropped up among Indian startups could be a lesson for many founders on what should not be done.

Also, founders should be aware that if they mess up, it is pretty much over for them. The situation of bad actors in the ecosystem can be kept at bay if the guilty are easily let off the hook.

Inc42: What, according to you, should young startup founders learn from recent corporate governance issues?

Ninad Karpe: Founders today need to understand that if they have the requisite capital, it is unnecessary to spend it all, just because they can.

In the Indian startup space, a root cause of the evils that have recently emerged is the flow of excessive capital, and hardly restriction on spendthrift founders.

I don’t think this will work anymore. However, this also does not mean that investors do not want founders to scale their businesses. What is important is to understand the nuances to strike a balance between dos and don’ts.

We need to understand that young founders come with a lot of enthusiasm to make a difference. They’ve quit jobs or they’ve not gone for jobs and come to the startup ecosystem where the success rate, at best, is just 10%.

When capital was flowing freely, many failed to spend it consciously. However, this will be history now, and the Indian startup ecosystem is going to see a lot of disciplined founders emerge not too far in the future.

The post What Funding Winter! Have Set Eyes On 100 Startups This Year: 100X.VC’s Ninad Karpe appeared first on Inc42 Media.

Weeks following Prosus’ partial stake sale in fintech leader PayU, the Prosus-backed digital payments giant is also expected to undergo top management changes, in addition to shifts in business strategy.

PayU chief executive officer Laurent Le Moal and chief financial officer Aakash Moondhra may step down from their positions, ET said in a report.

This development comes after the Netherlands-based investment firm Prosus’ fintech arm PayU sold a part of its business to Israel’s Rapyd for $610 Mn to focus on the Indian market.

Le Moal has been at the forefront of steering the fintech, payments, and credit enterprises and has been a part of the PayU Group since 2016. On the other hand, Moondhra, in addition to his role as CFO, has been an integral member of the core team actively shaping the Prosus Fintech Strategy, which encompasses both organic and inorganic expansion into high-growth markets.

With the changes at the global level, PayU India CEO Anirban Mukherjee is likely to report directly to Prosus chief executive officer Bob Van Dijk. Moreover, he might assume added responsibilities for overseeing international markets, such as those in Turkey and Southeast Asia.

Prosus’s payments and fintech segment posted a consolidated revenue growth of 52% to $903 Mn in FY23, the investment firm claimed earlier.

PayU’s GPO division offers advance ecommerce payment solutions to international merchants in over 30 countries, spanning Latin America, Central and Eastern Europe, and Africa. This business segment accounts for approximately 30% of PayU’s total revenue. In FY23, the GPO’s total payment volumes experienced a 12% year-on-year growth, reaching $34 Bn.

Prosus CEO said at the time of PayU part sale that the company is now fully focused on the huge fintech opportunity in India, where PayU is the leading payments service provider and is rapidly expanding its credit offering.

PayU is also exploring the options for a public listing of its Indian entities. Though there is no information for a potential timeline so far. Prosus wants to focus on PayU India’s lending business for its public listing, keeping the focus around both LazyPay and PaySense.

PayU India turned profitable in FY22, reporting a net profit of INR 126 Cr. Its total revenue rose 31% year-on-year (YoY) to $399 Mn in FY23.

The post Senior Exec At PayU May Exit Following Prosus’ Stake Sale appeared first on Inc42 Media.

At a time when artificial intelligence (AI) has taken the world by storm, India is witnessing rapid growth in the talent pool for the technology. The country is now among the top five fastest-growing AI talent hubs in the world, according to a report by professional social network LinkedIn.

“Singapore, Finland, Ireland, India, and Canada are experiencing the fastest rate of AI skills diffusion,” said LinkedIn’s ‘Future of Work Report – AI at Work’, adding that the number of  AI-skilled members was 9X higher globally in June 2023 compared to January 2016.

Compared to January 2016, India had 14 times more people who added AI skills to their profiles, enough for the country to secure a fourth spot on the list of fastest-growing talent hubs.

The rate of AI skills diffusion was the fastest in Singapore, which saw a 20X increase between January 2016 and June 2023. Other countries ahead of India were Finland (16X) and Ireland (15X). Canada (13X) was in the fifth position on the list.

The fastest-growing AI skills included Question Answering, Classification, Recommender Systems, Computer Vision and Natural Language Processing (NLP). According to LinkedIn, the AI skills were adopted across segments such as technology, retail, education and financial services.

The analysis of 25 countries by the LinkedIn report also showed that the number of LinkedIn members who added AI skills to their profiles nearly doubled after the launch of ChatGPT last year. The figure rose to 13% in November 2022-June 2023 from 7.7% in May-November 2022. For context, ChatGPT was launched in November 2022.

“To realise the full promise of AI productivity gains depends on the diffusion of skills across geographies, industries, and talent. AI adoption and optimisation of its use will of course take time, but at this early stage, it appears that the pace of diffusion is getting underway. The brightest global economic outcome is one where innovation can scale borders and boost productivity growth for all,” said Karin Kimbrough, chief economist at LinkedIn.

India has seen a rapid rise in AI adoption since the launch of ChatGPT. Indian companies and startups have jumped on the AI bandwagon, building products on top of OpenAI’s APIs and also building new algorithms for use cases across edtech, fintech, SaaS and others. The latest funding activity in the segment includes Kombai’s $4.5 Mn round, along with ZuAI and SocialBoat securing early stage funding.

The post India Among The Top Five Countries With Fastest Growing AI Talent: LinkedIn appeared first on Inc42 Media.