India-focused technology venture capital fund IDG Ventures India and Bangalore-based startup accelerator Axilor Ventures have come together to launch a programme to discover and fund early-stage startups in frontier tech sectors, the company said in a statement.
Christened the Frontier Tech Innovators Programme, it will fund startups looking to raise seed or pre-Series A round of funding. It will also comprise an investment committee that will have members from both funds who will participate from the discovery to the evaluation stages.
The programme defines frontier technologies as those that are not ready for mass-market commercial adoption such as augmented reality, virtual reality, blockchain and bitcoin, artificial intelligence and deep learning. It will also fund startups offering products and services in drone, space, robotics and autonomous vehicle technologies as well as those in healthcare, education and employment.
Applications for this year’s programme open on March 6 and close on March 24, according to information available on IDG Ventures’ website.
IDG Ventures will make the investment from its $200 million India-focused fund, which was launched in February 2016 and closed last month.
“We predominantly involve ourselves at the Series-A stage of investment while Axilor Ventures associates itself at the pre-seed and early stages of a startup by virtue of its programme design. The broad objective is to discover, identify and co-invest in startups at the early stage,” Sanat Rao, venture partner at IDG Ventures India told VCCircle over a telephonic conversation.
However, not every investment through this programme will be a co-investment.
“The final investment call will be taken based on various criteria including valuation. A valuation that suits one fund may not necessarily suit another. Hence, every investment may not exactly be a joint investment, while the broad idea is to co-invest. We are still figuring this out for more clarity," said Rao.
IDG Ventures India typically invests between $500,000 and $10 million in startups. Its portfolio includes companies such as Myntra (before its acquisition by Flipkart), Lenskart, Uniphore and Zivame, to name a few. IDG Ventures India is part of IDG Ventures, a global network of technology funds with about $7 billion in assets under management. The Indian arm of the fund was founded in 2006 by Manik Arora, Sudhir Sethi and TC Meenakshisundaram. Arora quit the firm in 2015.
“The frontier tech innovators programme looks to discover disruptive software companies from India with a potential to dramatically change the global landscape. IDG-VI has a strong track record of deep technology investments, including Active.ai, Sigtuple, Hansel.io, Infisecure, Forus, Perfint, Axio & Iviz,” said Sethi, chairman of IDG Ventures India.
The programme was set up based on various market research reports that pointed towards 2016 as a breakout year for frontier technologies, which collectively bagged $5 billion across the globe.
“We are excited by the ambition of Indian entrepreneurs to build deep-tech solutions using frontier technologies to solve large problems in India and the world. Through this programme, Axilor will continue to support and mentor path-breaking entrepreneurs,” said Kris Gopalakrishnan, chairman at Axilor Ventures.
Founded in late 2014 by former Infosys veterans S.D. Shibulal and Kris Gopalakrishnan, Srinath Batni, Professor Tarun Khanna and Ganapathy Venugopal, Axilor supports early-stage entrepreneurs through its accelerator and scale-up programmes. Their programme runs twice a year, in March and September. Axilor cofounder Kris Gopalakrishnan is an advisor to IDG Ventures India and has made co-investments with the VC firm in a number of startups.
At the accelerator stage, Axilor does not take any equity, funding each startup with up to Rs 50,000. It puts in Rs 25 lakh as seed funding, in exchange for a small minority stake, in startups that complete certain milestones as a part of its scale-up programme. In the last two years, it has supported more than 40 startups, made 20 investments and has an active alumni network of over 80 founders.
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