Much before angel investing and venture capital became sexy words, Mumbai Angels put together a group of people who wanted to invest their money in promising ventures. Together the group could fund startups which needed larger capital, generally beyond the capacity of an individual investor. It is one of the oldest angel networks in the country and today has over 150 angels as part of the network and 55 active startups in its portfolio. YourStory caught up with Anil Joshi, president, Mumbai Angels to discuss the startup scenario and the angel investing scene in India.
About The Venture
Anil has been part of the venture since the beginning and seen it evolve. Today he says there is a waiting list for people wanting to join their network but for the first two years the network had only 20 members. “Today the opportunities in the Indian market are very different from back then. More people are aware of the various avenues for investment and general awareness is much greater,” says Anil.
The portfolio companies of Mumbai Angels are a blend of eCommerce, education, healthcare, financial services and agricultural startups. The investment and exit that Anil and Mumbai Angels is particularly proud of is InMobi, erstwhile mkhoj – now a well-known mobile advertising company. Besides InMobi, Mumbai Angels have had seven other exits, including Myntra.com. The investee startups of the network are spread across Delhi, Mumbai, Bengaluru, Bhubaneshwar and Jaipur.
The venture looks for investing in early stage startups which have had good traction and present a scalable opportunity. There is a new investment cycle that starts every six weeks. Where the first four weeks are spent in evaluating the business model, the Top 4 selections are revealed in the fifth week and the investment cycle comes to an end in the sixth week, where selected companies get the opportunity to pitch to investors.
Promising sectors for investment
Anil had some solid reasons to share when asked about the skepticism surrounding the eCommerce business in India. “India is a young population and if there are consumers who can change their behavior, then a there is a higher probability of youngsters doing it,” reasons Anil. The Indian eCommerce market he says is today just $0.8 billion whereas a similar demography as ours – China has a bustling $3 billion eCom market. Add to that the 150 million internet penetration and the eCommerce story is still very true, says Anil. “Tier 2-3 cities are where the growth will come from. While consumer facing business will grow, a better opportunity lies in the B2B space. Because at the consumer side, you have to be price competitive. Indians are price sensitive and there has to be some real benefits they get through eCommerce,” explains Anil.
He is equally bullish about the education space, simply because of the opportunity that exists. “E-learning has gained good traction. Even the government has distributed Datawind tablets in many schools, making the platform for e-learning available. What is missing right now is connectivity, but from what we hear government is keen to hasten the process of rolling out the 4G network and that is good news,” says Anil. Indian parents have always attached high importance to the education of their children, what has been a missing link is the availability of good tutors for children. With e-learning this essential link can be connected and that is the real opportunity opines Anil.
Just like education, healthcare is the next area that most Indians are careful about. While the health wave in metros in very different from rest of the country, there is no denying the fact that people across the board have become more health conscious. Anil thinks the early opportunity in healthcare sector for startups will be in diagnostics. “Machines/kits that can help monitor vital stats of a person will gain importance. Healthcare today is like the telecom industry in the late 90s. STD calls in the early days used to cost as high as Rs 65 and today is not even a rupee. Affordability is the key,” emphasizes Anil. Proper diagnostics can also help reduce the cost of treatment and ensure the correct remedy is made available to the patient.
Health insurance is another area in healthcare that Anil is bullish about. “As incomes start going up, preventive maintenance will gain importance and there will be a demand for companies who can provide that last mile connectivity,” says Anil. And the biggest of it all are hospitals and healthcare centres –which continue to be a big need for the large population of India.
Anil calls agriculture the “ever-green” sector. Business that can contribute to each supply side flows and reduce wastage in that space can do well, he says. A network that connects the right people to each other, puts the right products in the right infrastructure, improves farmer & land productivity and eases out pain points that currently exist, will be hit according to Anil.
Beginning of a new chapter
Mumbai Angels recently started Bangalore Angels to help promote entrepreneurship and everything related in India’s own Silicon Valley. Anil is also on top of affairs at the Bangalore chapter and is looking to make investments in more service, product and ICT companies through the arm.