IndoUS Venture Partners recently deployed their first fund. The path they tread has been one of the many successful scripts in capital-investing in India…
Kalaripayattu from Kerala is considered the origin of martial arts, played the gravity-defying way by players, and it is such convention-defying methods that have helped IndoUS Venture Partners invest in 35 ventures in India so far.
Now renamed Kalaari Capital, the venture capital firm opened its second fund in India. Vani Kola, founder and Managing Director of the fund, called it a “milestone moment,” and reaffirmed the fund’s focus on early-stage companies. She recalled that in 2006, “I had great conviction that Indians can build great companies, but no validation, but now I do.” On renaming, Vani Kola said, “we wanted a name that is Indian, lasting, and represented the embracing of all the qualities that we value in entrepreneurs.” She feels that the enterprising Indians of this generation are putting the country on the global map. The second fund was launched with a meet-and-greet in Delhi, with the investee companies participating, and fund’s MDs and team explaining the vision of the fund as well as clarifying many early stage entrepreneurs’ doubts. It turned out to be an experience-sharing session of sorts by the entrepreneurs who had been immensely benefited by Kalaari Capital and the Kalaari team.
Commenting on the new fund’s focus, Vani Kola emphasized: “We like companies that have a tech flavor in them, but we invest in opportunities where there is scope for growth --- including education, clean tech companies and healthcare and in the next fund we will continue to invest in opportunities in these sectors.” These investments will typically be Series A, the first institutional round in a company.
Kumar Shiralagi, Managing Director, gave the thought behind the name change, saying “We searched far and wide and ended with a name that we all like. It is my pleasure and privilege to announce Kalaari Capital, a $150 million fund.” While thanking all the entrepreneurs of the invested companies, he added that “we back passionate teams and strongly believe in people.” He said their core belief is represented in the entrepreneurs backed by IndoUS Venture Partners so far, and will continue with Kalaari Capital. Elaborating further, Vani Kola said, “We get into the company early and devote 5-7 years towards building it. For the next 10 years, we nurture the companies for exits.”
Nitin Gupta, founder of Attero, said IndoUS invested in them purely based on the power point presentation they had shown. A large amount of capital was invested in the company just on the belief the firm had in the two young guys , “personally I have not come across any VC who has gone so out of the way and helped a company. Today we hold multiple patents all over the world,” adds Nitin. These “two young guys” sent a cold email to which Kumar replied. Commenting on Attero, Kumar said: “We are in game where there will be failures and losses. Success takes a while to build; there will be many places where entrepreneurs wonder whether it is the right thing to do. Both of us must have a clear intent to go and build the company, and we try our best to support it.”
Prakash of Gradatim, explained that “Kalaari understands the value of time, and the value of an entrepreneur, which contributes to who they are and where they are today.” Vani Kola further elaborated on the vision of the fund, stating “we are in this for the long term, and our collective relationship has to be based on respect and trust, and we always go in with our best offer to the entrepreneurs.” She added that “we want entrepreneurs to go out and do what is right for them, and for that we offer a fair valuation from our end.”
Madhukar Gangadi, MedPlus (largest pharma retail chain in the country) said that it started with Rajesh Raju, MD, Kalaari Capital, seeking us and giving us the money much before we needed it. Once Rajesh came on board, MedPlus’s management team almost doubled. Madhukar reflects the comfort level with Rajesh in saying, “for everything and all new initiatives I used Rajesh as the sounding board -- they came, saw the company, they made the decision in a week”, adding, “between Vani and Rajesh both on board, almost every metric fell in place, and they brought so much discipline to the board.” Vani Kola points out at the depth of engagement with the company: “Making the investment is the easier part for any venture investor. The hard part is being part of the ups and downs of building that company and having the conviction to help build that company.”
Meet and Greet with Early Stage Entrepreneurs
The Kalaari team and its portfolio spent time with around 100 early stage entrepreneurs for an informal round table session prior to the big press launch. We spoke to some of the entrepreneurs about their experiences at the meet and greet.
Manish Malik of Hazel Media had a different experience when he said: “What you hear from the horse’s mouth is always more impactful than from what you read on websites and blogs – and that was my greatest take-away for today. The session was very useful.”
Mahesh from Microqual, one of the investee companies of Kalaari Capital, felt that “the concept of meet and greet looks really nice. This is the best way to launch a fund, by getting people together, and by getting out there to tell them that they are here to invest.” Speaking about his experience with Kalaari, Mahesh said that the experience was top notch, and specifically added that Kumar is a mentor, friend and someone he wants in his life.
Ketan of Mettl (one of the investee companies) sounded excited as he explained: “A lot of people want to find out how to start the investment process, how to approach an investor, how to pitch to an investor, not many people know this in India, and this initiative by Kalaari was a great way to find out.” Also, speaking about his relationship with the investors so far, Ketan added, “Kalaari team brings a lot of maturity to the investor and portfolio relationships. They understand that it takes a lot to build your company. They are like crucial pillars to you, and they are willing to help you by going out of the way to build the company.”
Madhukar of MedPlus gave an insider view as an investee company: “They have got a great team, and they helped us take the company from 30 stores to 800 stores. We have the best of class experience with them, and continue to maintain the relationship with them despite the exit.”
Mukul of Myntra said that this exercise is very much needed: “When you are just starting out, there are so many things that are not clear to you, and forums like these are starting points for clarifications for many young entrepreneurs.” Vijay and Venu from Carz said that they have a bi-weekly call with investors and that shows their seriousness in helping the company. They added: “Currently we are 16 centers and are stabilizing the business, and hope to grow soon. And, Kalaari team is helping in a big way.”
During Meet and Greet, one of the questions asked was: Why don’t investors put money in the “idea stage”? To which Kumar responded that VCs invest other people’s money and that they can’t fool around with somebody else’s money.
Ritesh of Oravel put forth this opinion: “After speaking to them I got to know exactly what sectors they invest in and what sectors they don’t invest in. You understand that they work very closely with entrepreneurs and being a young company that helps a lot.”
Vikram, an entrepreneur, asked, “How to go from an angel round to Series A?” to which Kumar responded raising money in exchange for equity can be done with banks as well, you don’t need to shell out equity for that. He added, “While choosing investors, think about how they can take your company from A to B, and help you grow the company rapidly.”
Surely, this was quite an entrepreneurial way to launch a fund! Kalaari Capital will definitely set new paths for venture capital in India through their collaborative company-building activities by a deeper engagement with entrepreneurs.