Veteran entrepreneurs look to ramp up their bets in Indian startups

During 2023, the country’s top 10 angel investors have made as many as 101 investments in Indian startups, according to data by Venture Intelligence.
 

This is heartening to note as overall venture capital (VC) funding has been southward bound in the country. Though this number is lower than the 207 of last year, it certainly is significant when one looks at this from some of the recent fund announcements made by a few well-known entrepreneurs.
 

Earlier this week, Vijay Shekhar Sharma, founder and chief executive officer (CEO) of Paytm, launched the VSS Investment Fund, his maiden fund with a total corpus of Rs 30 crore. The fund will target artificial intelligence (AI) and electric vehicle (EV)-related startups, which are incubated in India, and are specially focused to serve Indian consumers and businesses. “The launch of this fund is a continuation of my belief in supporting young and promising Indian founders, aligned with the fact that technology has a huge role to play in the development of the country,” Sharma said.
 

The Paytm founder has made investments in startups like Ola Electric, Josh Talks, Mesa School, UNNATI, KAWA Space, Praan, GOQii, KWH Bikes, Daalchini and Treebo Hotels.
 

Like Sharma, Zerodha founder and CEO Nikhil Kamath, earlier this month, unveiled his own WTF Fund. It will back and mentor entrepreneurs under the age of 22, with a fund size of Rs 80 lakh.

Under the initiative, budding entrepreneurs will receive mentorship from Ananth Narayanan (founder of Mensa Brands), Raj Shamani (content creator), and Kishore Biyani (Future Group founder), besides Kamath himself. Meanwhile, his brother and fellow Zerodha founder Nithin Kamath had, in August, announced that he would allocate Rs 1,000 crore to Indian startups through his investment firm Rainmatter Capital.

“I am very bullish on the India story, and it is not only because we are faring better than many other countries, but also because of the inherent strengths of our economy,” said Rohit Bansal, co-founder, Snapdeal, to Business Standard.
 

Bansal said his investment arm Titan Capital screens more than 4,000 inbound proposals every year, and is often the sole investor in early-stage startups. It has made investments in companies like Ola, Ofbusiness, Urban Company, Mamaearth, Pepper, and Credgenics.
 

“We are actively investing and will continue to do so. The opportunities and quality of businesses we are seeing are even better than in the last two years,” Bansal said. He has been among the most active angel investors in Indian startups.
 

This year so far, he has taken bets in 17 startups, coming in at the third spot behind Cred’s founder Kunal Shah (19 investments), and fellow Snapdeal co-founder Kunal Bahl (18 investments), respectively, according to Venture Intelligence.

Kamath’s strategy to be forever invested in a company is unique. He announced that he was increasing allocation by Rs 1,000 crore in a perennial structure or with the ability to stay invested forever.
 

With no exit mandates, Kamath said, it would help founders build an enterprise in the Indian market. Unlike developed countries, here it can take much longer to become “resilient and sustainable.”
 

After setting up Rainmatter in 2016, his investment arm has pumped in around Rs 400 crore into 80 startups so far and will ramp up further. Rainmatter has made investments in startups like Cred, Pee Safe and Agnikul Cosmos.
 

This optimism comes at a time when the startup world is going through a funding slowdown, where investors are becoming much more selective with their bets.
 

Founders, after building their own companies, have often invested in newer startups.
 

According to data from Tracxn, a market intelligence platform, funding from angel investors to Indian startups stood at $683.6 million across 281 deals in 2021. In 2022, these investments stood at $517.3 million from 177 rounds.
 

This year, however, the quantum of investments for individual investors has come down to $28.1 million from just nine deals so far. This is in line with the ongoing funding slowdown in the startup ecosystem.
 

But veteran entrepreneurs are upbeat on startups.
 

“Our strategy (at Titan Capital) is marked by high conviction, an operator mindset, and a commitment to investing in the founder as much as the business. We focus on long-term commitment, guided by instinct and experience,” added Bansal.