Kanpur, 01 August, 2019.
Venture Catalysts, India’s first, largest and pioneering integrated incubator and accelerator platform, recently launched 9 Unicorns Fund, India’s first accelerator VC to identify the best ideas and early stage start-ups from India. 9 Unicorns Fund will identify high potential early stage businesses across sectors including but not limited to domains such as Electric Vehicles, mobility, Augmented Reality VR, AI and ML, fintech, retail & FMCG startups.
India is home to 26 unicorns today, but only one of them was a part of the 600 accelerators in the country. The number of accelerators itself is much lesser in our country as compared to China (32k+) and US (20k+). While the pace at which number of unicorns continue to grow is healthy (India added 8 unicorns in 2018 alone compared with 9 in a span of 6 years from 2011-2017), the absence of dedicated accelerators is a problem. 9Unicorns Fund has been envisaged to fill this gap by emerging as a one-stop mentoring, networking and growth facilitation platform for emerging businesses to grow to their full potential.
9Unicorns Fund has a dedicated fund allocation of INR 300 crore offered by Venture Catalysts. Out of the funds, the accelerator VC plans to invest in 100+ companies every year, promising a standard deal of INR 60 lacs for 5% equity along with a further scope to invest INR 3-5 crore more during subsequent funding rounds for start-ups that show sustained promise over a period of time. Considering a significant number of start-ups die within the first few years because they are unable to raise the right funding rounds at the right time, 9Unicorns Fund has put in place a unique de-risking strategy. The start-ups will have VCats as a facilitator, with an access to the firm’s extensive network for its seed funding. This will ensure a runway of up to 18 months for the start-up, post which it will be able to secure larger funds for Series A+ rounds from growth stage investors. This protective cushioning at an early stage makes the Fund an extremely attractive proposition for businesses, and its strategy to lower the risk of sustenance for start-ups considerably distinguishes its value proposition.
The Indian start-up ecosystem is the third largest ecosystem in terms of number of start-ups as well as unicorns and ‘soonicorns’,however it is still not functioning at its optimum. Complex deal structures, slow customer acquisition, and lack of accelerators are among the major factors hindering the growth of start-ups. To put this into perspective, the total amount of Series A funding by VCs in India was 20x less than the US in 2018. 9Unicorns Fund, with the sustained support of Venture Catalysts, aims to change this narrative.
Throughout a period of 13 weeks, 9Unicorns Fund will help founders build scalable & sustainable business models, and develop a highly collaborative work culture suited for the 21st century, the lack of which is the 2nd biggest reasons for start-ups to fail. “9Unicorns Fund will revive idea stage funding in India” said Dr. Apoorv Ranjan Sharma, Co-Founder and Managing Director, 9Unicorns. “Like in sports, timing is of great value in the business environment. Could Sachin Tendulkar have become the legend he is today if his family and coach had failed to identify his early promise? With 9Unicorns Fund, we aim to do something similar. Identify budding businesses with terrific possibilities and ensure them every kind of assistance to ensure their success.”
9Unicorns Fund will implement Convertible instrument for all its investments which will disrupt early stage deal making in India. Elucidating on other benefits, Dr. Apoorv further added, “9Unicorn Fund start-ups will benefit from ready access to business angels & VCats’ corporate community of 4500+ members, which is becoming stronger as we add more portfolio companies. They will also be able to access markets across 26 cities across the world as well as tier-II, III and IV cities in India to build a large customer base quickly.”
Initiatives such as 9 Unicorn Fund are needed to augment the growth of Indian start-up ecosystem, acting as the perfect backdrop for new ideas to flourish and reach a certain maturity level. By being a part of this initiative, start-ups will also be able to access global VCs & Family Offices for series A / B apart from committed investments of INR 3-15 crore by Venture Catalysts. This helps to create better funding environment for startups, which reduces mortality rate significantly. Given the high success ratio of Venture Catalysts in acquiring lucrative multi-bagger exits for its investors in a short span, the 9 Unicorns Fund is well poised to leverage this expertise and propel the Indian start-up growth juggernaut forward.