Every investor should start allocating some part of their money into early-stage funding: Nandini Mansighka of Mumbai Angel Network

Angel investing wasn’t heard of when Sasha Mirchandani and Prashant Chowksey set up Mumbai Angels Network in 2006. 

“It was informal with a few friends getting together and deciding to invest in a few startups,” says Nandini Mansinghka, Co-promoter and CEO, Mumbai Angels, in a conversation with HerStory. 

Today, Mumbai Angels has a 170 company-strong portfolio across sectors and cities across India. From the overall portfolio, the platform has exited/ secured the next round of funding for 60. It has 550+ investors spread across 40+ cities within and outside India. 

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The rise during the pandemic 

Angel investments have seen a sharp rise despite the COVID-19 pandemic. 

Nandini says, “Last year, surprisingly, was our best year ever. In March 2020, when the lockdown hit, we were as worried as everyone else, but we had more investors joining our network. We closed more deals than ever before. We closed the largest raises for any single company last year. There was a freeze in later-stage investors initially, but that also changed in the second half of the year. We saw 37 companies from our portfolio raise in the next rounds and see some exits.” 

According to her, this means: 

1. Investors had more time and looked at a new asset class. The same investor who didn’t have time earlier saw this new class of investment. 
2. We have realised the importance of virtual elements for investors and entrepreneurs to have more interactions and conversations. COVID has advanced this. 
3. There was a dip in the equity space in the first three to four months, and people were getting worried about their own businesses. This created an interest in early-stage and private-equity investments.

Nandini says the same trend is continuing this year, but there is now a distinction between sectors that have been hit and those that haven’t. Fundraising hasn’t been impacted for sectors that have not been affected. 

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A growing asset class 

Explaining the growth, Nandini says, “We have gone through a lot of changes and seen different cycles of shifts in angel investing. It today is an ecosystem and has evolved with players. There are over 8,000 to 10,000 startups that we see every year.” 

She says today there are networks that understand angel investing. 

Nandini came onboard Mumbai Angels as a co-promoter and CEO in 2017, when the team realised they had to treat angel investing as an asset class. 

“It isn’t just about unicorn hunting. It is about saying every investor in the country who has a certain portfolio should start allocating their money into early-stage investing,” she says. 

She adds that companies that are to be listed on BSE or NSE in a few years haven’t even been born today. 

“Think of it as a company that grows from an idea to getting invested through several rounds, then becomes a unicorn and gets listed. We are the first external investor and have seen this journey in more than 170 companies. It is a huge cycle.” 

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Exits and a mature ecosystem

The investments are bullish, but Nandini says this doesn’t mean exits won’t play a significant role. They will, in fact, become more important. 

“In the last 10 years, later-stage investments had growth, but for maturity of an ecosystem you need exits, acquisitions, and strategic investors into smaller businesses. Our portfolio gets the next round from the strategies. Twitter, Reliance, and Zomato to name a few,” she says. She adds that this is when a startup expands to a small cap, mid and large cap - this is happening in India now. 

“This is a good sign of the ecosystem maturing.” 

On investing advice and gender biases, Nandini says, “Entrepreneurship and investment are gender-agnostic. I never look at the gender, I think entrepreneurship is a craft; it is about the individual - how much they are willing to give to the craft to learn and go out there. What makes a successful entrepreneur is the same, irrespective of gender.”