Bengaluru: Tracxn, a data analytics firm that provides financial information on start-ups, is launching a start-up incubator called TracxnLabs, backed by Flipkart co-founders Sachin Bansal and Binny Bansal, to invest in new companies and help them grow.
The Bansals, in their personal capacity, along with other individual investors, helped contribute $10 million to launch TracxnLabs, which will invest in start-ups and provide the initial minimum viable product capital in the range of $20,000-$50,000.
“As Tracxn’s research became intensive and comprehensive in select sectors, we began to observe large gaps in the market," Tracxn co-founder Abhishek Goyal said. “In parallel, we shared our research with a few entrepreneurs who found it immensely helpful in refining their initial idea. Over time it became apparent we could contribute to entrepreneurs. Hence, we decided to scale this initiative."
Goyal said TracxnLabs has started working with more than 10 start-ups and will announce deals over the coming months in sectors such as online rentals, lending and food technology.
Goyal was the first investor in Flipkart via his previous employer Accel Partners. He also ran the beauty and fashion online retailer Urban Touch from 2011 to 2013, until its sale to rival Fashionandyou.
“With the current pool of capital, we can easily work with 50 start-ups a year. As our capital pool increases, we can work with a much larger set of start-ups," Tracxn co-founder Neha Singh said.
With TracxnLabs, the company plans to use its large database and research to help entrepreneurs with start-up ideas and funding trends. Tracxn aims to help speed up the process of opportunity identification and launching start-ups.
“There are entrepreneurs who start up after identifying a gap in the market or an opportunity, and there are entrepreneurs who don’t necessarily seek to address a gap," said Avinash Raghava, co-founder at iSPIRT, a software products lobby group. “The initiative by Tracxn would be very helpful, especially for the first category of entrepreneurs as it’s always useful to know about what is selling, what are the market trends, etc. The success of such an initiative depend on the quality and depth of data, of course."
While the Flipkart co-founders and other individual investors are putting up the cash, they won’t be involved in mentoring and guiding the start-ups identified by TracxnLabs. Tracxn has set up a team of 40 analysts to help launch promising start-ups through TracxnLabs.
These analysts will identify large market sizes and business opportunities across sectors, look for teams that are already working on these ideas or are interested in starting up, and then help them launch.
“We are passionate about start-ups and want to contribute in the growth of the entrepreneurial ecosystem in India," Flipkart chief executive officer Sachin Bansal said. “TracxnLabs is a very disruptive initiative and, if it succeeds, it can potentially help in multiplying the number of quality companies coming out of India."
Started in 2013 by Goyal and Singh, former venture capital investors at Accel Partners and Sequoia Capital, respectively, Tracxn provides information on start-ups across India, the US, Europe and some other regions to venture capitalists and other investors. Sachin Bansal and Binny Bansal, as well as others such as Sahil Barua of e-commerce logistics firm Delhivery, together put $200,000 in Tracxn in 2013. The company raised $3.5 million from venture capital firm SAIF Partners in April.
Tracxn uses technology to collate data such as number of employees, funds raised, revenues and list of competitors about private companies from the Internet to help VCs make investment decisions and help start-ups identify and get data on potential acquisition targets. After Tracxn’s technology gathers raw information, its analysts verify key data and curate it by dividing the companies into different sectors.
The company is increasingly venturing into related business. Earlier this month, it launched a new platform called Tracxn Syndicate to connect start-ups with potential investors. It is also looking for news editors to launch a news platform for start-ups.