Venture Catalysts launches 9Unicorns Fund, India's 'first accelerator VC'

Integrated incubator Venture Catalysts (VCats) has launched the 9Unicorns Fund to identify the best ideas and early stage startups from India. VCats claims that 9Unicorns is first accelerator VC in India, similar to the likes of Y Combinator.

The newly launched fund will identify high-potential, early stage businesses across sectors, including but not limited to domains such as electric vehicles, mobility, AR, VR, AI, ML, fintech, retail, and FMCG.

The incubator said that India is home to 26 unicorns today, but only one of them was a part of the 600 accelerators in the country. The number of accelerators is much lesser in India as compared to China (32k+) and US (20k+).

"While the pace at which number of unicorns continue to grow is healthy (India added eight unicorns in 2018 alone compared with nine in a span of six years from 2011-2017), the absence of dedicated accelerators is a problem. 9Unicorns Fund has been envisaged to fill this gap by becoming a one-stop mentoring, networking, and growth facilitation platform for emerging businesses to grow to their full potential," it said in a statement.

9Unicorns Fund has a dedicated fund allocation of Rs 300 crore offered by Venture Catalysts. Out of the funds, the accelerator VC plans to invest in 100 companies in three years, promising a standard deal of Rs 60 lakh for five percent equity along with a further scope to invest Rs 3-5 crore more during subsequent funding rounds for startups that show sustained promise over a period of time. 

The startups will have VCats as a facilitator, with access to the firm’s extensive network for seed funding. This will ensure a runway of up to 18 months for the startup, post which it will be able to secure larger funds for Series A+ rounds from growth-stage investors.

Changing the startup narrative

Dr Apoorv Ranjan Sharma, Co-Founder and Managing Director, 9Unicorns, said the Indian startups ecosystem is the third largest ecosystem in terms of number of startups as well as unicorns and ‘soonicorns’, However, it is still not functioning at its optimum.

Complex deal structures, slow customer acquisition, and lack of accelerators are among the major factors hindering the growth of startups, he adds. To put this into perspective, the total amount of Series A funding by VCs in India was 20x less than the US in 2018. The 9Unicorns Fund, with the sustained support of Venture Catalysts, aims to change this narrative.

Over 13 weeks, 9Unicorns Fund will help founders build scalable and sustainable business models, set up their first core teams, and offer access to networks and markets across 26 cities across the world and Tier II, III, and IV cities in India to build a large customer base quickly.

"The 9Unicorns Fund will revive idea stage funding in India,” Apoorv said.

The startups will also be able to access global VCs and family offices for Series A and B apart from committed investments of Rs 3-15 crore from Venture Catalysts. It will implement convertible instrument for all its investments, which will disrupt early-stage deal-making in India, VCats said.

Dr Apoorv further added, “The 9Unicorn Fund startups will benefit from ready access to business angels and VCats’ corporate community of 4,500+ members, which is becoming stronger as we add more portfolio companies."

(Edited by Teja Lele Desai)

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