Mumbai: Singapore-based BAF Spectrum Pte Ltd made its first India investment last week in Gurgaon-based Le Travenues Technology Pvt. Ltd, which runs travel search engine iXiGO.com. A collaboration between private investors and the Singapore government, BAF, which stands for Business Angel Fund, is the second investor at the pre-series A (first round) funding stage to enter the Indian market in the last month. Earlier, Singularity Ventures backed by West Asian investors launched operations in the country.
The firm, which typically invests between $500,000 (Rs2 crore) and $1 million, has a dedicated corpus of $14 million. Thus far, it has funded five companies headquartered in Singapore. Its undisclosed investment in iXiGO marks its first venture outside home market. “We are impressed by the Indian market, and are exploring investment opportunities here,” said William Klippgen, executive director, BAF Spectrum.
Several companies in the online travel space here have received funding in the last two years, including Bangalore-based Yatra Online Pvt. Ltd, Mumbai-based Cleartrip Travel Services Pvt. Ltd and New Delhi-based Makemytrip India Pvt. Ltd.
While most venture capitalists (VCs) say the sector is saturated, “we believe a travel information aggregation model works better than acting as an online travel agent”, Klippgen said. The company has previously invested in two other start-ups in this area—SkyTravel.com Pte Ltd, a B2B (business to business) travel product firm and UeeeU.com Pte Ltd, which offers a mobile travel search platform.
In India, it is also looking at investments in the online transactions space across verticals such as jobs, real estate and automobiles. Over the last 12-18 months, many sources of seed capital have sprung up, including New Delhi-based India Angel Network, Mumbai-based Seedfund and Mumbai Angel Network and Bangalore-based Erasmic Venture Fund.
BAF follows an interesting public-private partnership model as yet untried here. The Singapore government, under its Business Angel scheme, grants $7 million angel money to be invested in start-ups to a group of private investors on the condition that they match the amount with their own capital. As an incentive, the government returns a third of its profits on exits to the investors. It is a hybrid model that combines the Band of Angels mode of investment with government grant distribution. In markets outside Singapore, the angels put in their own money.
BAF comprises seven angels, a mix of European and Asian investors, who mentor their portfolio companies and help them in securing the next round of funding from VCs. The fund also has a seven-member expert advisory panel to assist on deals, which includes Kai-Fu Lee, president, Google China, and academicians such as Edison Liu, executive director, Genomic Institute of Singapore.