With 102 deals in 2020, Venture Catalysts emerges as the leading incubator & accelerator in India this year; third largest & most active global player

Investment firm Venture Catalysts Group (VCats) maintained its leadership position in the Indian early-stage start-up investments category for 2020, even as the COVID-19 pandemic disrupted businesses globally. The Mumbai-based company, which runs an incubator and a SEBI-registered accelerator fund 9Unicorns, made the highest number of deals at 102 this year, compared with 63 a year ago.

Focused on strengthening the start-up ecosystem in the smaller Indian towns, VCats has invested over Rs 700 crore through a syndication in several idea-stage and early-stage businesses across sectors this year, vis-à-vis Rs 500 crore in 2019.

Some of the co-investors that were a part of the syndication included — Anicut Capital, DSG Consumer Partners, Nexus Venture Partners, Facebook FB Start, Lightspeed Venture Partners India, Matrix Partners India, Titan Capital (Rohit Bansal and Kunal Bahl), Pankaj Chaddah of Zomato, Sanjiv Bajaj, SOSV, Pravin Jadhav, Lalit Keshre and many other well-known names.

VCats surpassed early-stage or idea-stage investment firms such as AngelList India, Mumbai Angels and Blume Venture in all parameters associated with start-up investing, right from funding to exits, data from leading global research firms Tracxn and Crunchbase showed.

At a time when the COVID-19 outbreak has triggered an economic crisis and adversely hit the start-up ecosystem, with several top investors tightening their purses, VCats continued with its mission to support the budding entrepreneurs. The investment firm, founded by Dr Apoorva Ranjan Sharma, Anil Jain, Anuj Golecha and Gaurav Jain in 2016, has also created an investor base for investing in several global start-ups based in the United States, UK and the Middle East markets.

For the second consecutive year, VCats has also made it to the list of top 10 global most active accelerators and incubators. It is now at the third position behind players — YCombinator and Techstars and has surpassed popular accelerators such as Plug&Play, 500 Startups, SOSV and Antler Global in terms of number of deals done.

US-based YCombinator led the pack at 379 deals as on December 12, 2020.

On retaining the pole position in India and making it to the third position globally, Dr Apoorva Ranjan Sharma, Co-Founder and President, Venture Catalysts Group said, “While several investment firms in India and abroad witnessed a slower funding activity in 2020, we continued to grow. As a founder-friendly investor, we believe that adversity brings several opportunities along with it. In fact, we were able to scout many innovative and good start-ups at right valuations and were fortunate to back these promising start-ups.”

“Another important factor responsible for our growth was that the Indian start-up ecosystem grew faster than other developed economies on the back of strong government support and rising consumer demand for home-grown products and solutions. The pandemic has set in a new world order and given rise to different new sectors and we see an opportunity in this new normal.”

VCats has also experienced a good year in terms of exits. The firm witnessed a 33.3% increase in the number of cumulative exits and liquidity events at 36 deals in 2020, indicating that late-stage investment activity valuations remained unaffected during the year despite the crisis. 

The investment firm, which typically infuses $100k upto $1.5 million in early-stage and idea-stage start-ups, invested in companies such as BluSmart, ChargeZone, Dukaan, Raskik Mitron TV, FreightBro, GetVantage, Pariksha, Prescinto, Resolve AI, Toch, Zingbus, RoundLabs, and Stage amongst others. Among sectors, DeepTech, B2B Saas, FinTech, InsureTech, F&B, HealthTech, Media dominated the investments this year.

With a robust network of 5000-plus angel investors across Tier-2 and Tier-3 cities, VCats has been an early backer at some very successful startups such as BharatPe, Supr Daily, Beardo, Coutloot, Fynd and Blowhorn. In less than five years, the firm’s overall portfolio investments have reached a total valuation in excess of $1.2 billion.

Going into 2021, Dr Sharma expects VCats to continue investing in sectors such as FinTech, Edutech, agritech, FMCG, ecommerce, logistics and supply chain management. It is also bullish on deeptech such as AI and Data Analytics as businesses across sectors are going digital even with physical distancing becoming the new normal.

Also, this year, VCats has aggressively expanded its footprint to over 33 Indian cities and nine countries. The firm, which is pioneering entrepreneurship in Bharat or India beyond the top 10 metros, aims to have its presence in over 100 start-up cities and towns in the country on the back of rapid reforms undertaken by the Government to create more smart cities.

“There is a massive digitalisation revolution happening in the country at present. While the government has a major role to play, private sector players and large conglomerates are also helping make India the world’s largest startup ecosystem. For example, the Rs 5,000 crore startup fund launched by Reliance Jio to foster ‘businesses of future’ will give a major boost for entrepreneurship in small Indian towns. Besides, with affordable data and strong broadband services, Jio is already expanding the enterprise sector. These developments give us enough encouragement and we expect to invest around Rs 1,000 crore in the coming year and double the number of deals. We expect the growth coming in from small B and C towns of India,” Dr Sharma added.

In August this year, Oyo’s founder Ritesh Agarwal joined hands with VCats as an advisor and mentor to support India’s growing start-up ecosystem. Agarwal will work with the incubator to promote entrepreneurship across the country’s tier 1, 2 and 3 cities and help India become ‘atma nirbhar’ (self-reliant).

About Venture Catalysts

Venture Catalysts is India’s first integrated incubator. It invests $250K – $1.5 Million in early stage start-ups that have potential to create enduring value for over a long period of time. Over the last few years, it has been instrumental in developing and nurturing the country’s vibrant startup ecosystem with a strong presence in Tier 2& 3 markets. Venture Catalysts brings a lethal combination of Capital, Mentoring and Business Network to help investee companies to succeed. Their innovation provides value to start-ups through its extensive angel network, funding, community, services and co-working facility. Venture Catalysts is focussed on providing startups with access to continuous capital from fund, investor network, Tier 1 founders & CXOs, and family offices besides providing them with market access from corporates and global growth programs.