Unicorn India Ventures: Providing Debt And Equity Products Matching The Needs Of Capital Structure

Amit Mehra, Founding Principal, Unicorn India VenturesHaving a robust VC network is critical to a strong startup ecosystem. The early stages of any business based on innovative idea carry huge risk. Fund Managers, Principals of VC funds bring expertise in identifying companies with innovative models and then work with these founders to scale their businesses. The VC landscape in India started mid-late 90s when Silicon Valley investors like Draper Fisher Jurvetson invested in companies like The next set of investors in early 2000s were Indian-Americans who after working for big US PE funds like General Electric setup funds like Westbridge Partners, Insight Partners investing in Financial Services companies like Edelweiss. Around 2005-2010, big US VC funds acquired these earlier funds for India exposure ­ Accel acquired Erasmic Venture Fund, Sequoia acquired Westbridge. Till 2008 there was no proper early stage investment ecosystem in India with first check by these big players being $2-$3M. Around 2008, angel networks like Mumbai Angels, India Angel Network started bringing angel investors together who invested smaller checks of Rs. 5-10L each. From 2012, a number of first-generation domestic entrepreneur funds like Unicorn India Ventures, Blume Ventures, Kae Capital entered, that have since raised their second or third fund.

The Present Scenario
VC Funding is typically more suited for new age B2B or Consumer businesses that have potential to scale rapidly and not for traditional slow growth businesses. A growing number of family businesses are backing established VC funds which give them a window seat into the startup world. Several of these family businesses have then co-vested with
the fund or extended credit lines to portfolio companies.

There are three interesting trends unfolding in the Indian VC space. First, there is greater International LP interest in India's early stage ecosystem. After all, there are very few markets showing high single digit growth rates, huge internet penetration and demographics as favourable as India. India is now also attracting increased participation from Chinese corporates and funds like Tencent, Alibaba, Qiming, Shunwei amongst others. Second, with maturity of the ecosystem, there is growing number of second time founders because of the reduced risk factor. A number of VC funds have launched programs targeting second time founders such as Accel's rebound program. The third trend is that traditional late stage investors have launched programs targeting seed investments like Sequoia's Surge and Light speed's Extreme Entrepreneurs. Presence of a greater number of second time founders and mature first-time entrepreneurs with decades of experience as well as availability of strong signalling mechanism is driving this move.

As the Indian VC market matures, there is lot firms like Unicorn can learn from established ecosystems of Silicon Valley, UK and indianize it. Silicon Valley is torch bearer of SaaS based tech business and is good leading indicator how these businesses evolve as our per capita GDP increases. Unicorn is seeing a good number of SaaS based subscription businesses take off after being indianized for pricing, features and offerings. Its portfolio company Pharmarack has enjoyed phenomenal success in the Pharma SaaS domain. Similarly, it is looking to UK for emerging trends and best practices in the FinTech domain. The coming years hold interesting times for all ecosystems to learn from each other.

Amit Mehra, Founding Principal, Unicorn India Ventures
Amit is a Founding Principal at Unicorn India Ventures. He brings hands-on experience in scaling start-ups and raising institutional funding. Prior to that Amit was a Management Consultant advising Fortune-100 companies in India, US and Europe across Corporate Strategy and Investment Analysis. From its first equity fund, Unicorn India has invested in close to 20 companies like Inc42, Open Bank, Sequretek, Pharmarack, SmartCoin, Open Appliance, Boxx.aito name a few.

A joint MBA from Duke University and London School of Economics, Amit is active in their alumni networks in India. He also holds the CFA charter and is an active member of Indian Venture Capital Association (IVCA) and Indian Association of Investment Professionals (IAIP). In his initial years, Amit held Product Development roles and did his Bachelors in Computer Engineering with Distinction from Mumbai University.