A deep dive into angel investments made by founders of Flipkart, Paytm and Ola
The founders of Flipkart, Paytm and Ola have between them made 54 angel investments. The hope is that at least some of these investees will go on to scale like the pioneering Unicorns of India.
When Indian startups started attracting risk capital in the millions and billions and entrepreneurs started getting hard cash for their equity the hope was that they would in turn spread the love — invest into smaller and newer startups.
That has, in fact, happened. Some of the more active angel investors in India are entrepreneurs themselves.
The rise of angel networks, like Indian Angel Network, and of platforms that connect investors and startups, like LetsVenture, has helped streamline the early stage fund raising process.
While many senior executives at corporates, partners at venture capital and private equity firms and members of business families have also become angel investors, many early stage startup founders prefer getting on board someone who has gone through the startup journey. The belief is that the knowledge sharing would be much better.
This has made the founders of Indian Unicorns much sought-after as investors and advisors.
YourStory takes a look at the founders of the top three companies in the Indian startup ecosystem from an angel investment perspective.
To be fair, some of the most active entrepreneur-angel-investors are not heads of Unicorns. For instance, Girish Mathrubootham, Co-founder and CEO of SaaS firm Freshworks has invested in over 20 startups. Before Snapdeal’s troubles last year, its founders Kunal Bahl and Rohit Bansal were active angel investors, with Kunal investing in 23 startups and Rohit investing in 18.
We have decided to take a look at the founders of Flipkart, Paytm and Ola as they are in a unique club. These are the most successful companies that have emerged from the Indian tech startup ecosystem. These companies are still on the growth path and are engaged in pitched category leadership battles with competition.
While Flipkart’s founders, Sachin Bansal and Binny Bansal, are no longer operational heads of the company, Paytm’s Vijay Shekhar Sharma and Ola’s Bhavish Aggarwal and Ankit Bhati are still very much at the helm. Yet, they have all invested in startups.
As the charts below show, except Flipkart’s Sachin the others have all made investments this year too.
These founders have also participated in Series A rounds, albeit much fewer than the seed rounds they were part of. Binny and Vijay are the most active among the founders with investments in 19 startups each. While Paytm’s Vijay started investing as early as 2010 (social venture Milaap was Vijay’s first angel investment), Binny and Sachin began angel investing only in 2013 and 2014 respectively. Gifting platform Giveter was Binny’s first angel investment and electric vehicle maker Ather Energy and food startup Spoonjoy were Sachin’s first investments.
Flipkart’s Bansals turned angels around the time Flipkart started raising large rounds of funding. Flipkart raised $1 billion in 2014, marking the first billion-dollar investment into an Indian startup. They have also turned Limited Partners (LPs) in Blume Ventures, Pi Ventures and Tracxn Labs.
Similarly, Ola started raising rounds of hundreds of millions primarily from 2014 — a $210 million round in 2014 and $900 million over two rounds in 2015. Bhavish and Ankit, Founders of Ola, started investing in 2016.
These founders have also spread their money across a large range of sectors. Sachin, for instance, has made an investment each in sectors like healthtech, edtech, data analytics and media. Binny, on the other hand, has a clear preference for healthtech with four investments in this category. In February Binny invested in Pandorum Technologies, which 3D prints liver tissue. His other healthtech investments include breast screening startup Niramai, Supercraft3D, which provides visualisation solutions for doctors and manufactures body implants, and SigTuple, which provides healthcare solutions based on blood samples.
Paytm’s Vijay has invested in four media startups — The Print, The Ken, Factor Daily and Deal Street Asia.
Many of the companies that these entrepreneurs have invested in are still in the very early stage. Yet, most of the companies these founders have invested in are still around. Educational games company MadRat Games, in which Flipkart’s founders and Ola’s founders were investors, pivoted in 2016-16 to launch a wearable game but has since shut. Food startup Spoonjoy is the other company from Sachin’s portfolio that has shutdown. From Vijay’s portfolio, manufacturing startup Sourceeasy has shutdown.
However, none of these founders have a big winner yet, in the same league as Snapdeal founders’ investment in Ola.
Of the five founders of Flipkart, Paytm and Ola, Paytm's Vijay Shekhar Sharma and Flipkart's Binny Bansal are the most prolific angel investors.
Paytm's Vijay Shekhar Sharma was the first to turn angel investor. His first investment was in social venture, Milaap.
Among the five, only Flipkart's Sachin Bansal has not made any angel investment this year. Vijay's 2018 investments are in online media firm, Factor Daily, and in computer vision firm Dimension NXG, which has made India’s first augmented reality headset AjnaLens. Binny has invested in healthtech firm Pandorum Technologies, which 3D prints liver tissue, and in online lending platform Avail Finance. Ola's founders, Bhavish Aggarwal and Ankit Bhati, have also invested in Avail.
Considering the founders are angel investors, most of their investments are at the seed stage (including bridge rounds).
Some of the Unicorn founders have participated in Series A funding of a few companies after having backed them at the seed stage. For instance, Sachin provided seed funding to edtech company Unacademy and to healthtech company SigTuple in 2016 and then participated in their Series A rounds in 2017.
Few of the startups that have raised funding from these Unicorn founders have shut down so far. Flipkart's founders and Ola's founders invested in educational gaming company Madrat Games, which shut down in 2016.
Most founders have spread their investments across multiple sectors. Binny clearly favours healthtech, edtech and community and networking based startups. Binny's healtech investments are Pandorum Technologies, Niramai, Supercraft3D and SigTuple. His edtech investments are Unacademy, HashLearn and DeZyre. His community and networking based investments are TouchTalent, Roposo and Plabro Networks. Paytm's Vijaay's clear favourite is new media, with investments in The Print, The Ken, Factor Daily and Deal Street Asia.