BackKalaari Capital launches seed and incubation programme
The programme called Kstart will incubate about five start-ups every quarter
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Bengaluru: Kalaari Capital, the homegrown venture capital firm with stakes in unicorns such as Flipkart Ltd and Snapdeal (Jasper Infotech Pvt. Ltd), has launched a seed funding and incubation programme called Kstart. The firm has so far focused on investing in Series A funding rounds and above.
The firm looks to deploy about $20 million in 40 start-ups over the next two years. The programme will incubate about five start-ups every quarter.
The move comes at a time when venture capital firms are clawing back on investments, forcing companies to refrain from splurging on customer acquisition and discounts, instead focusing on increasing revenues. The likes of Accel Partners and SAIF Partners have already started focusing on seed investments in the last two years.
Kalaari Capital started out in 2006 as Silicon Valley based serial technology entrepreneur Vani Kola teamed up with friend and former Intel Corp. vice-president Vinod Dham and Kumar Shiralagi, another Intel executive, to launch a $190 million fund for India, backed by Silicon Valley venture capital firm New Enterprise Associates (NEA). The firm was then called NEA IndoUS Venture Partners.
Three years later, NEA decided to make direct investments in India, the Indian firm rebranded to IndoUS Venture Partners.
In late 2012, IndoUS Venture Partners rebranded as Kalaari Capital with a new $162 million fund.
The firm has backed Myntra Designs Pvt. Ltd—the online fashion store which was acquired by Flipkart in 2014 for a whopping $330 miilion—and Snapdeal. Thus, Kalaari has equities in both Flipkart and Snapdeal, unicorns valued at close to $15 billion and $6.5 billion respectively.
Some of the Kalaari’s other portfolios such as online furniture store Urban Ladder, education technology start-up Simplilearn and online lingerie store Zivame, have become successful and raised multiple rounds of funds.
The firm had also roped in Ratan Tata, chairman emeritus of Tata Sons, as an advisor last year. Tata has also invested in some of Kalaari portfolio companies such as Snapdeal, Urban Ladder, Zivame, cashback and coupons site CashKaro and food technology start-up Holachef.
“The investor in some way is a talent scout in a music company. You get musical groups who are doing their best to impress that talent scout. You can’t always put down everything in numbers. The scout intuitively feels that this group is really going to go and he can’t define why he is saying that," Tata said at the launch of Kstart on Friday.
“I think one looks for an investor that has a similar sort of excitement over what one is trying to do and is ready to not only risk his money but participate in the journey that has to be taken using his contacts, mentorship, etc, to make this work. It can’t be just plain numbers because there’s a lot of intuitive inputs that most of us don’t give much importance to," he added.
Kalaari raised its third India-focused fund of $290 million in September last year.
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