Mindtree co-founders’ Mela Ventures to invest in early-stage startups

The Sebi-approved ‘Category-2 AIF fund’ for early stage companies targets a fund size of ₹200 crore. The fund aims to make 4-5 investments in the next 18 months with ticket size of ₹7-10 crore each.

The announcement comes a year after Natarajan and Parthasarathy, now managing partners with Mela Ventures, left Mindtree post acquisition by business conglomerate Larsen & Toubro (L&T) Ltd in June last year. Mindtree founders had then termed the acquisition as “hostile" and made attempts to resist the takeover.

The fund is backed by institutional investors, global technology leaders and seasoned startup investors. “We are by design limiting ourselves to Indian investors so that the money will stay within the country and help the India growth story," Natarajan told Mint in an interview.

Other India-based Mindtree cofounders – Subroto Bagchi, Rostow Ravanan, Janakiraman Srinivasan, and Kalyan Banerjee – are also part of Mela Ventures in the form of investors.

The ‘MV Core Tech Fund-I’ is aimed at B2B technology startups in areas of augmented reality/virtual reality (AR/VR), artificial intelligence/ machine learning (AI/ML), and quantum computing, Parthasarathy said. “The criterion is they must be solving a scalable problem for the enterprise."

The founders believe their experience in building Mindtree to a billion-dollar company from a VC-funded startup will be a valuable asset to the entrepreneurs. They believe, while the right idea and funding are great starting points for a startup, they do not guarantee success. “The key is to make these innovative ideas co-exist with financially beneficial models," Natarajan said.

Mela Ventures will help investee companies strengthen their go-to-market strategy, make the right technology choices, and build high levels of governance and transparency.

Founders and senior executives of IT companies in the past have turned venture capitalists or investors after retiring or moving on from active roles in their companies.

Rajan Anandan, former India head of Microsoft and Google is now the managing director of Sequoia Capital (India).

Infosys cofounder Nandan Nilekani invests in startups through VC fund Fundamentum while Kris Gopalakrishnan and SD Shibulal have launched Axilor Ventures focussed on early-stage startups. TV Mohandas Pai, former Infosys board member invests in technology startups through VC fund Aarin Capital.