Anand Lunia Starts IndiaQuotient- A Fund That Will Invest in Early Stage Pre-Revenue Startups
Anand Lunia, who founded Brainvisa Technologies back in 1999, went ahead and had a very successful stint with Seedfund. Finding a new calling, with a vision to invest in companies that need funding at a very early pre-revenue stage, Anand Lunia has founded IndiaQuotient starting with a corpus of $ 5 million. Along with Anand, Madhukar Sinha is the other partner who in his earlier avatar was a senior assistant manager at Aavishkaar. The investment committee consists of Jaydeep Barman, the founder and CEO at Faasos and Elizabeth Chapman, the country head at Wonga India. I got in touch with Anand to know more about IndiaQuotient and what prompted him to startup a new venture capital firm.
You had been with Seedfund for more than 3 years. What led you to part ways and establish IndiaQuotient?
IndiaQuotient is born out of our desire to be something different, daring, against the norms; something that we would expect our entrepreneurs to do. So while some fund managers have found their calling in larger funds, we are doing something that we love- investing very very early, and investing very boldly. Seedfund has a special place in my heart, and I have learned a lot from the Partners there. Pravin Gandhi wrote the first cheque for me in Brainvisa, and from then on he has been a mentor to me. I owe a lot to the fund and the people there. It’s just that I have found a different calling.
With a motive to invest in pre-revenue startups, do you think you’re taking a huge risk?
FB was a great stock 5-6 years ago, but today, it’s risky! It is a myth that pre-revenue is more risky than post revenue. If that is the case would we say that returns are guaranteed on established, profit making, publicly listed stocks! Our aim is to participate very early in companies that have potential to become huge in the future. Yes, we will have much less data to evaluate, and hence lots will depend on the unknown, but we will have much more to gain. Frankly, there is a class of companies that you just can’t get into unless you do it very early.
What sectors will IQ be focusing on while funding?
We were sleeping in the class when they taught us about ‘Sectors’. But we see people, consumers, around us buying all sorts of stuff: basic needs like food, water, housing, healthcare, education, financial products and a little bit of discretionary spending. We prefer to see businesses which somehow leverage the boom in consumer demand, target a large market and use technology to its advantage. We don’t like ‘the Indian version of xyz’ and if your business is complex to understand, we just might take that much longer to get back to you.
What would be the average ticket size of the funding?
We will fund companies for atleast 12 to 18 months, as we believe that is the time it takes to be ready for a Series A round. The amounts can be anything between 20 lacs to 2 cr.
There has been a huge stress on the team if one is looking to get funded. What are your views here?
We believe that all entrepreneurs are destined to do great things. Some just take more time than others. So, if we think a team is ready, we will take a plunge right away, and not make them run circles. If the team is not ready, we will keep in touch and try to help.
What trends are you seeing in the Indian startup Industry? Which segment do you see flourishing in the future?
The Indian Consumer has been the key driver for new business growth. Be it mobility, entertainment, healthcare, education, food, shelter etc, there has been an acceleration everywhere. As the culture changes, demand patterns change, and new opportunities emerge. Then there is the other class of tech companies that are building global products while being based out of India. It might seems clichéd but we’re pretty much sector agnostic and one has to be when one is talking about India. There are so many aspects that need focus and a disruption can be brought about in any sector.
The Indian startup scene is buzzing and flourishing. Do you think that Innovation is actually happening on a large scale or is it restricted to pockets and a chunk of the startups are just clones? How does one develop his business model?
The smarter entrepreneurs are cloning because the clones have a better chance of getting funded! In the long run, everybody has to focus on designing to local tastes. But this approach of localising is too restrictive. The best winners are the fresh ideas. Mydentist with its counter-intuitive model of full time dentists and owned clinics is an example. You look at your consumers, figure out what they can consume, and then design your business model.
IndiaQuotient will definitely be a very good avenue for startups looking for funding and more information about the fund can be accrued here.