KOCHI: At a time when startups from other states are hogging the limelight for attracting multi-crore investments, a venture capital fund has announced Rs 100-crore fund dedicated only for investments in startups from Kerala -- perhaps a first instance of a dedicated fund for investments in startups exclusively in a particular state.
Unicorn India Ventures, a venture capital fund (VCF), which is raising Rs 400 crore for its second fund, will set aside Rs 100 crore for startups from Kerala, said its managing director Anil Joshi.
Unicorn’s first fund of Rs 20 crore, which had Rs 10 crore contribution from the Kerala Startup Mission (KSUM), has invested in seven startups in Kerala - Gen Robotics, Clootrack, Inntot, Bank Open, Perfit Fashion, Sector Qube and Best Doc. The assets of the first fund have grown 2.5 times, encouraging Unicorn to back more startups from the state.
“For a fund-of-fund (FoF) structure, the venture fund will put in money on a 1:1 ratio. This was the case in Unicorn’s first fund, when both Unicorn and KSUM committed Rs 10 crore each,” said Robin Alex Panicker, venture partner, Unicorn India. “For Unicorn’s second fund, KSUM had assured Rs 20 crore, while Unicorn has committed Rs 80 crore,” he said, adding that this was a big vote of confidence to state’s startup ecosystem.
Though the VCF had the mandate to invest its first fund in four to five years, it managed to fully utilise the entire corpus in two years’ time, reflecting the potential in the startup sector in Kerala, said Joshi.
Also, the startups, where it has invested, are on a high growth path, requiring funds for future growth. “You invest in 5-10 startups. As the companies grow it would require Rs 15-20 crore each but we will not be able to invest further,” said Joshi, adding that this problem will also be resolved with the Rs 100 crore new fund.
Panciker reckoned Kerala-based startups, which are looking to move to Bengaluru and other cities outside Kerala in a bid to attract more funds, may be encouraged to stay put and expand in state if it gets the funds’ backing. Clootrack has set up its office in Kochi, after moving to Bengaluru. Joshi said ultimately the startups in Kerala would grow and flourish only when it attracts funds locally viz. from corporate houses, high net worth individuals (HNIs) and family offices or those who manage wealthy families’ funds.
