IDG Ventures, Unilever, AWS team up to invest in early-stage tech start-ups
- Inflation likely to exceed RBI’s 4% target in November: report
- Maersk sees falling freight rates in bearish sign for trade
- News in Numbers: 39% MF assets invested in equities, balanced funds in November
- Gujarat elections, Fed meet, Parliament session to keep markets on edge
- Bubble in Bitcoin or elsewhere?
Bengaluru: Venture capital firm IDG Ventures India Advisors Pvt. Ltd has partnered with Unilever Ventures Ltd, the venture arm of consumer packaged goods company Unilever Plc, and Amazon Web Services Inc. (AWS) to launch an initiative to invest between $500,000 and $5 million in early-stage tech start-ups of India.
IDG will invest in start-ups across consumer technology, software, health-tech and fintech over the next two months through the initiative called the Innovation Program, managing director Sudhir Sethi said in an interview.
Sethi did not mention the number of investments or the money that has been set aside for this programme.
Unilever Ventures is an investor in IDG and may also invest in the shortlisted start-ups, which will also get access to technology experts from AWS (owned by Amazon.com Inc.) and receive other benefits from the cloud services provider.
Last year, IDG invested in six start-ups, including content platform Little Black Book and fashion rental firm Flyrobe through two separate initiatives.
This year, IDG has merged the two initiatives into Innovation Program, which is in addition to the bets that IDG makes as a matter of course.
Like last year, IDG expects to receive 1,000 applications from interested start-ups.
The programme starts on Thursday, and start-ups can apply until 26 June. IDG expects to finalize investments by 8 July.
“Typically, do entrepreneurs get decisions (about whether they will invest or not) from investors in 30-45 days? No, but that’s what they will be getting in this programme. Conventionally, do entrepreneurs get the money in 60-75 days? No, but again that’s what they’ll be getting in this programme,” said Sethi.
“Speed becomes our competitive edge. Our whole organization is geared to do the tech evaluation and the investment decision at twice the pace of the industry in this programme,” he added.
IDG was launched in 2006 by Sethi and T.C. Meenakshisundaram, both of who worked at IT services company Wipro Ltd.
Fresh from raising its third fund of $200 million, IDG Ventures India—which counts Flipkart, Lenskart and Yatra among its 65 portfolio holdings—was one of the most active venture capital firms last year. It has set aside roughly $130 million of the new fund toward early-stage investments. The Innovation Program will be funded from that corpus.
“The bulk of the investments in the Innovation Program will be seed and pre-Series A. We may make a few Series A investments as well. Our signature as a VC is that we always get into our market leaders early and ahead of time. That’s what this programme is for,” Sethi said.
Apart from sourcing deals through their networks, which is how most start-up investments are done, some VCs have launched special initiatives to attract a large number of potential investments in a speedy manner. Apart from the increased deal volume, VCs also get better valuations and increase their brand awareness through such initiatives.
Apart from the cash, tying up with high-profile partners, such as AWS, also helps attract applications to these initiatives.
“Unilever Ventures invests in companies but also brings a lot of knowledge around branding, consumer insights and supply chain. And AWS obviously is very well-known in the start-up world. Getting these kinds of benefits is very helpful for start-ups,” said IDG Ventures India executive director Karan Mohla.