Two years ago when Naganand Doraswamy sold his startup Span Infotech to Evry, a Norwegian company, he was with flush with funds from the exit. Two things sprung to mind at the time; one was to go ahead and start another company or become an advisor to startups. But a chance meeting with T V Mohandas Pai at a StartUp event led him to set up a Limited Partnership fund with a corpus of Rs 125 crore with the likes of Prashant Deshpande, Arihant Patni, and Amit Patni footing in the money. An initial Rs 50 corpus crore will be deployed as seed fund and the rest of the money will be allocated for Pre-Series A or Series A. The fund will be used invest in four to five companies a year.
Mohandas Pai run Aarin Capital, which has invested in a dozen startups, came in as a General Partner. Sources say that more than a third of the Ideaspring Capital corpus comes from General Partners.
Arihant and Amit have a big data fund called Hive, which has invested in four startups. Prashant has been an investor and mentor of young technology companies.
"Before Span Infotech, I had started two more companies that did not take off. But I had immense learnings from their closure," says Naganand, Managing Director of Ideaspring Capital. He adds that he decided to start a fund after talking to several players in the ecosystem.
The fund ethos
Corporates like SAP, Lowe's, Target, Analog Devices, and Cloud Nine have revealed to YourStory that they would like to work with startups that can focus on core technology such as data engineering, IoT, and software IP. This is what Ideaspring likes to bring to the table.
The fund will focus on technology startups and will seed early-stage companies. "Most funds focus on B2B or B2C strategies. But we are going to fund product companies," says Naganand. He adds that the fund will guide the companies to build global scale with products.
It will participate in the startup's growth towards Series A with its programme called StartUp Assist.
It has an investment committee comprising of Startup stalwarts like Ravi Gururaj, Sharad Sharma, and Sanjay Anandan who will help companies scale up to Series A. The average size of the investment can go from $5,00,000 to $1 million.
"We want startups whose intellectual property is in algorithms. The ideas can range from machine learning to big data engineering," says Naganand.
As per the National Association of Software and Services Companies (NASSCOM), the Indian Information Technology (IT) sector is expected to grow 11 per cent per annum and triple its current annual revenue to reach US$ 350 billion by FY 2025.
According to the India Brand Equity Foundation, India is the fourth largest base for new businesses in the world and home to over 3,100 tech startups. According to Nasscom and Zinnov, the country is set to increase its base to 11,500 tech startups by 2020.
"Our asset strategy, as investors, we see a clear space for technology that is scalable. This is a deep technology focus fund," says Mohandas Pai, MD of Aarin Capital, who is the General Partner in Ideaspring Capital.
Shot by H Rukmangada Raja
Video edited by Anjali Achal