Venture Catalysts Group to invest Rs 1,000 cr in start-ups in 2021

Indian early-stage start-up investor Venture Catalysts Group (VCats) is planning to invest around Rs 1,000 crore in start-ups in 2021. In 2020, the fund invested around Rs 700 crore, up by 40 per cent compared to 2019, through a syndication in several idea-stage and early stage businesses across sectors. Some of the co-investors, who were part of the syndication include Sequoia Surge, Nexus Venture Partners, Facebook FB Start, Lightspeed Venture Partners among others.

The Mumbai-based investment firm VCats runs an incubator and a SEBI registered accelerator fund 9Unicorns. It made the highest number of deals at 102 this year, compared to 63 a year ago.

VCats, which focuses on strengthening the start-up ecosystem in the smaller Indian towns, has invested over Rs 700 crore through a syndication in several idea-stage and early stage businesses across sectors this year as compared to Rs 500 crore in 2019.

Some of the co-investors that were a part of the syndication included — Sequoia Surge, Anicut, DSG Consumer Partners, Nexus Venture Partners, Facebook FB Start, Lightspeed Venture Partners India, Matrix Partners India, Titan Capital (Rohit Bansal and Kunal Bahl), Pankaj Chaddah of Zomato, Sanjiv Bajaj, SOSV, Pravin Jadhav, Lalit Keshre and many other well-known names. Apoorva Ranjan Sharma, co-founder and president, Venture Catalysts Group said that while several investment firms in India and abroad, witnessed a slower funding activity in 2020, VCats continued growing as the fund believed that adversity brings several opportunities along with it.

"In fact, we were able to scout many innovative and good start-ups at right valuations and were fortunate to back these promising start-ups,” said Sharma.

In 2021, Sharma expects the firm to continue investing in sectors such as finTech, edutech, agritech, FMCG, ecommerce, logistics and supply chain management. It is also bullish on deeptech such as AI and Data Analytics as businesses across sectors are going digital even with physical distancing becoming the new normal.

Also, this year VCats has aggressively expanded its domestic and global footprints to over 33 Indian cities and nine countries, respectively. The firm, which is pioneering entrepreneurship in Bharat or India beyond the top 10 metros, aims to have its presence in over 100 start-up cities and towns in the country on the back of rapid reforms undertaken by the Government to create more smart cities.

There is a massive digitalisation revolution happening in the country at present. While the Government has a major role to play, private sector players and large conglomerates are also helping make India the world’s largest startup ecosystem. For example, the Rs 5,000 crore startup fund launched by Reliance Jio to foster ‘businesses of future’ will give a major boost for entrepreneurship in small Indian towns. Besides, with affordable data and strong broadband services, Jio is  already expanding the enterprise sector.

"These developments give us enough encouragement and we expect to invest around Rs 1000 crore in the coming year and double the number of deals. We expect the growth coming in from small B and C towns of India,” Sharma said.

The investor, typically invests from $100,000 upto $1.5 million in early-stage and idea-stage start-ups, invested in companies such as BluSmart, ChargeZone, Dukaan, Raskik Mitron TV, FreightBro, GetVantage, Pariksha, Prescinto, Resolve AI, Toch, Zingbus, RoundLabs, and Stage amongst others. DeepTech, B2B Saas, FinTech, InsureTech, F&B, HealthTech, Media dominated the investments this year.

With a network of over 5,000 angel investors across tier-2 and tier-3 cities, VCats has been an early backer at some very successful startups such as BharatPe, SuprDaily, Beardo, Coutloot, Fynd and Blowhorn. In less than five years, the firm’s overall portfolio investments have reached a total valuation in the excess of $1.2 billion.

In August 2020, Oyo’s founder Ritesh Agarwal joined hands with VCats as an advisor and mentor to support India’s growing start-up ecosystem. Agarwal will work with the incubator to promote entrepreneurship across the country’s tier 1, 2 and 3 cities and help India become ‘atma nirbhar’ (self-reliant).

On the front of exits as well, 2020 seemed to have been a good year for VCats. The firm witnessed a 33.3% increase in the number of cumulative exits and liquidty events at 36 deals in 2020 indicating that late stage investment activity valuations remained unaffected during the year despite the socio-economic crisis.

According to data sourced from leading global research firms — Tracxn and Crunchbase, VCats has surpassed early stage or idea stage investment firms such as AngelList India, LetsVenture, Mumbai Angels and Blume Venture in every other parameter associated with start-up investing right from funding to exits. Founded by Apoorva Ranjan Sharma, Anil Jain, Anuj Golecha and Gaurav Jain in 2016, VCats has also created an investor base for investing in several global start-ups based in the US, UK and Middle East markets.

For the second consecutive year, the firm has also made it to the list of top 10 global most active  accelerators and incubators. It is now at the third position behind YCombinator and Techstars, and has surpassed popular accelerators such as Plug&Play, 500 Startups, SOSV and Antler Global in terms of the number of deals.