IBEF: July 15, 2019
To back up companies at pre-series A and Series A stage, Unicorn India Ventures has launched a Rs 400 crore (US$ 55.6 million) fund.
The fund, which has established commitments worth Rs 50 crore (US$ 6.95 million), has an aim to invest completely in business-to-business technology start-ups, which include software-as-a-service, artificial intelligence, machine learning, and Internet of Things (IoT).
The new fund’s plan is also in line with its latest crop of investments, all tech based. All the investment is aimed at businesses, rather than individuals.
Although, with the latest funds, the firm plans to invest in around 24 companies with money allocated for follow-on rounds till the Series B stage. A larger fund also permits Unicorn to write larger cheques and achieve more meaningful stakes. From its first fund, cheque sizes ranged from Rs 50 lakh to Rs 4 crore. However, from this fund, Unicorn strategies to invest between Rs 3-5 crore as the first cheque, going up to Rs 25-30 crore (US$ 3.47- 4.17 million), including follow on rounds, as per the statement from the company.
Unicorn’s portfolio comprises providing start-up Smartcoin, cybersecurity firm Sequretek, and Open Financial Technologies, which offers banking services to businesses. Open raised a US$ 30 million round led by US-based investment firm Tiger Global, which is also one of India’s most prolific startup investors.
Unicorn’s fundraise comes at a time when early-stage investments are growing in value even as the number of deals fall, representing the increased investor appetite to write larger cheques, but only for hand-picked companies.
The focussed deal making also comes at a time when most of India’s major venture capital funds—Sequoia, Accel, Matrix, and Nexus Venture Partners—endure to be focused on the seed stage, as they seek to invest earlier in companies, which gives them the time to grow the business.
Also, traditionally established late-stage investors such as South Africa’s Naspers and Chinese internet giant Alibaba, have also been taking interest at more early-stage deals in India. The increase in early-stage investment funds represent a global trend.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.