New Delhi-based angel investment group Indian Angel Network or IAN (formerly Band of Angels) launched operations in Mumbai on Friday. After New Delhi and Bangalore, this is the group’s third chapter in the country since it was formed in early 2006. Backed by individual angels (people who invest their own money in start-ups in lieu of equity stake) such as Mphasis BFL Software founder Jerry Rao and Quatrro BPO Solutions founder Raman Roy, as well as corporate angels such as Google Inc. and IBM Corp., the group has already invested in seven start-ups so far.
IAN works in a similar fashion to Mumbai Angels, which specializes in seeding start-ups in the city. Its 60 members make individual investments in each start-up and the typical deal size is Rs1 crore to Rs2.5 crore, with a threshold of Rs5 crore. However, unlike Mumbai Angels, start-ups will have to contend with having more shareholders on board with IAN. On an average, about 10 members invest jointly in a start-up, each picking up individual stakes—as many as 20 invested in one start-up. The number of angels investing in each company varies according to interest by the members, says Saurabh Srivastava, a founding member of IAN. Mumbai Angels, by contrast, typically has three investors in each start-up.
The group will close two more deals within a month—a New Delhi-based online education company and a robotics firm currently located outside India (it will relocate to India post the investment). Previous investments include intellectual property services company Sanshadow Consultants Pvt. Ltd and online DVD rental firm Madhouse Media. The group recently changed its name to avoid confusion with the US-based angel investment fund Band of Angels.
aurabh Srivastava, a founding member of IAN, says the number of angels investing in a firm varies according to interest
A majority of the members on IAN’s board are currently from New Delhi, but the organization plans to have an equal mix of investors between the three cities. “Ideally, we will expand to include about 100 members across the country,” says Srivastava. It receives close to 40 propositions from start-ups every month.
Incidentally, IAN and Mumbai Angels had co-invested in online DVD rental company Madhouse Media in December 2006. The investors saw an unusually early exit when Madhouse was acquired by another online DVD rental firm Seventymm in June this year for an undisclosed amount.