Venture Catalysts' 9Unicorns rebrands itself, launches $200 million fund

The firm plans to announce its first close by November, aiming to pool 30-50% of the total fund size, said Apoorva Ranjan Sharma, managing director of Venture Catalysts Group and co-founder of 100Unicorns, at a press conference.

100Unicorns will offer initial investments ranging from $250,000 to $1 million to early-stage companies for a 5-10% stake in each, with the possibility of further investments of up to $3 million in subsequent rounds, Sharma said.

Adding to demand

The new fund is a testament to the growing demand for early-stage financing in India where, despite the funding winter, investors continued to back entrepreneurs starting up. Pre-seed, seed and Series A funding continued to see a lot of traction through 2022 and 2023, data from Tracxn shows.

Sharma highlighted that the Indian startup economy has witnessed a 15-fold jump in funding between 2015 and 2022. “I strongly believe India will emerge as the ‘Startup Nation’ in the next 10 years, with the maximum number of entrepreneurs, the highest number of unicorns and the largest employment generated by startups.”

Unicorns are startups that are valued at $1 billion or more.

According to data from the Department for Promotion of Industry and Internal Trade (DPIIT) and Tracxn provided by the firm, India is now the third-largest startup ecosystem in the world with more than 110,000 new businesses across the nation. The country is home to 111 unicorns with a combined valuation of $350 billion.

The second fund will have around 80-85% of the capital deployed in India, with plans to involve partners from the US, West Asia, Southeast Asia, and African markets for the remaining amount. “There are around 77,000 startups in the African continent, which remains a lucrative area,” Sharma said.

The fund plans to partner with sector veterans and leading corporates across nine sectors—SaaS, fintech, EV & energy, defense, health, education, travel, D2C, and agritech—while reviewing 14,000 startups. “Today, Indians are targeting moonshot ideas in emerging sectors like space technology, biotech, electric vehicles and cleantech, which bodes well for the new fund being launched,” he noted.

This is the company’s second fund. The first fund was established in 2020, with $100 million available as funding. Through the first fund, the company invested $70 million in 145 companies with a gross internal rate return (IRR) of 28.6% till March 2023. Peak XV Surge, YCombinator, A91 Partners, Motilal Oswal Private Equity, Matrix Partners, Yournest & Lightbox among others were co-investors in the fund.

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Published: 14 May 2024, 07:13 PM IST