In conversation with Amit Banka, MD, Unilazer Ventures on the fund's investment philosophy
Starting up was never so sexy and neither being an entrepreneur this cool! But one very important spoke in the wheel of this ecosystem is the VC/PE fraternity -- a big support to the space. They are the ones who give wings to alot of dreams and if it were not for them, many ideas would not have seen the light of the day. Then there are angel investors who also extend that much needed support. Ronnie Screwvala was an angel until sometime back, before he decided to launch a professionally managed fund to help start-ups.
Unilazer Ventures promoted by Ronnie is a Rs 800-crore fund, which has now put together a team to help start-ups make strategic choices and build successful organizations. The fund operates in four broad areas of PE, angel and startups; commodities; treasury(debt & equity) and social.
Helping Ronnie with the day-to-day operations at Unilazer Ventures is Amit Banka, who is the MD of the fund. Amit is responsible for asset allocation and management of the fund. Prior to Unilazer, Amit headed corporate finance, strategy and business development for UTV Group. And before UTV, Amit was part of Zee/Essel Group and Salora Group. YourStory recently caught up with Amit to understand the philosophy of investments made by Unilazer and to discuss his thoughts on the startup space in general. Excerpts.
About the fund
Unilazer Ventures says Amit is not a fund – fund. So although the fund is run professionally, it is a family office and there is no sword hanging on getting the returns on investment immediately, unlike many funds which have limited partners investing in them. “You can say there are pros & cons of doing it this way, but the main thing is there is freedom to do work with a venture for substantial time before we exit,” he says. There is no 5-10 year window that the fund needs to be with the venture for, so if a venture requires hand-holding for longer period that can be done and similarly if it is for a shorter duration, they offer the flexibility.
Amit says they look to invest in sectors that have positive indices on its side and therefore have made investments across F&B, education, agri-led and eCommerce companies. Valyoo Technologies, Mera Career Guide, M.I.T.R.A, INI FARMS, Oncontract.com, Himex Limited and Blume Ventures Fund are the investments made by Unilazer todate.But is it a good idea to have such a diverse investment philosophy, as most funds we have spoken to have a sharper focus. “So we have discussed this internally to see what is it that we want to stand for as fund. And Ronnie decided that we want to stand for the entrepreneur, back bright ideas and work with people who can create an impactful thought process,” explains Amit. Unilazer is also an investor in Swades Foundation, an impact investment fund that is working with rural India. Swades works with corporates, young urban India, not-for-profit organizations and Governments to execute programs in rural India, says Amit.
What they bring to the table?
Unilazer believes in partnering the entrepreneur throughout the journey and hand-holding him at every stage of growth. The rich level of operational experience that the Unilazer team has, helps the fund provide assistance across marketing, advertising, consumer understanding or any area that the entrepreneur needs assistance in. However it is important that the startup is willing to learn and is open to ideas. “We review our investments constantly. And because we have investments across sectors there is also a lot of knowledge that can be shared among our portfolio companies,” says Amit. Unilazer however does not have a definite ticket size for investment. So while they are extremely bullish on India’s consumption story and therefore the investments in F&B, agriculture and eCommerce, Unilazer is not keen on investing in sectors like infrastructure, roads, power and energy due to the high capex requirements. The fund will also not invest in the media space due to the conflict of interest with UTV business, says Amit.
Sourcing of potential investment candidates for investment is a two-way process at Unilazer. The fund usually receives many direct investment applications which are scrutinised thoroughly before proceeding ahead. Unilazer also participates in a various industry events to scout for opportunities. Investment milestones also differ on a case-to-case basis; the fund is also flexible when it comes to exiting its investments. Different timelines exist for maturity and exit, and a complete exit is dependent on a number of parameters, says Amit.
India versus the West
Amit says the startup ecosystem in India is still to develop and realise its full potential. There is still a lot of initial handholding that needs to be done here. Also the proof of concept stage is still not being vetted by very mature people. So there are lot of ideas, incubations centres in the country but ideas coming out of these are not scalable beyond a point and go into the market.
Government agencies and banks in the country are also tough to approach and there are not enough incentives being given by them to support entrepreneurs feel Amit. Even the angel networks all do not have enough operational experience, so although there is money available, time given to businesses to mature and grow is insufficient, he says.
“I think there should be no number crunching at this point. For 5-10 years there will be riff-raff in the space, money will be lost, but we need patience to build business. We have enough funds in the country now and the India consumption story is true. There will be an outcome eventually,” says Amit.