Piper Serica launches angel fund for investing in tech startups

Mumbai-based Piper Serica Advisors Pvt. Ltd recently launched SEBI Registered Category 1 Angel Fund to invest in early-stage companies that are using technology to either disrupt or significantly improve industries and processes. 

The current fund size is capped at ₹100 crores with a small green shoe option and the angel fund will make 30-40 investments over the next 3-year period. The launch was led by Abhay Agarwal, Founder and Fund Manager at Piper Serica.

“Piper Serica’s Angel fund mainly focuses on start-ups with exponential growth models. The Fund aims to be a seed-to-IPO fund and will stay with its winners for a period of up to 10 years and to reduce the risk of high mortality. The Fund will use its proprietary AI ML-based tool called Yoda.ai to screen investment opportunities,” the portfolio management service provider said in a statement.

This tool uses 17 parameters to predict the probability of success and then selects the company with a score of 70% or above for further diligence. This is the first AIF being raised by Piper Serica and it plans to raise a series of AIFs over the coming years and the fund will prioritize joint investment opportunities with other lead investors that may include syndicates, individuals, angel platforms and funds, accelerators, and incubators, the company added.

“The Piper Serica Angel Fund will reduce the risk of high mortality by diversifying its portfolio over 30-40 investors. It will improve its returns by staying invested for as long as possible. According to a study conducted by Industry Ventures, a longer holding period improves the success rate and the IRR. Early-stage funds with an average holding period of 3 years have 78% failure rate and 11% IRR while those with 9 years of holding have 64% failure rate and 30% IRR,” as per the statement.

Founded in 2003, Piper Serica is SEBI registered portfolio management service (PMS) company that provides access to Indian and international investors to the Indian equity markets. The PMS has an AUM of ₹400 crore as reported to SEBI and aims to build an asset under management of ₹2000 crore in the coming 2-3 years.