Micro VC firm Virtu Propdeal scouting for investment opportunities in AI, fintech
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Kolkata-based micro venture capital firm Virtu Propdeal Pvt. Ltd is looking out for startups in artificial intelligence (AI) and finance technology (fintech) segments for making potential investments, a top executive told VCCircle.

The company would also bet on software as a service (SaaS) companies focussed on real-estate, construction and manufacturing industries as well as machine learning (ML) startups, said Arpan Shah, partner, Virtu Propdeal.

Virtu Propdeal has so far made investments in three firms—artist- and designer-focussed marketplace PosterGully, online custom-printed T-shirt brand CaptainKyso and White Cliff Homes Altamount, a residential project in Nagpur.

As VCCircle exclusively reported, the company successfully exited PosterGully when the promoters of private exhibition organiser Asian Business Exhibitions and Conferences (ABEC) acquired the marketplace in August last year.

The relatively smaller seed fund worth $500,000 primarily focussing on investing in real estate companies was established in 2012 by Arpan along with Vineet Baid, Shivam Shah and Saif Servaia. It began its journey by investing in White Cliff. However, the company has since evolved into an early-stage tech fund because in Arpan’s words, “over time, we realised that our core strength was fundamentally in the technology space.”

Arpan is a Stanford University alumnus and currently leads data engineering at Robinhood, a Bay Area-based fintech firm. He also acts as an adviser to Aakon Labs, a Prague-based transportation-focussed tech incubator, and Augment Ventures, an early stage, sector agnostic Indian venture fund. In the past, Arpan has worked with companies such as Google, Tesla, Microsoft and Fitbit.

A graduate of University of California, Berkeley, Baid previously worked with Wells Fargo and is currently associated with a stealth mode MI startup. Shah is a serial entrepreneur who has previously launched ventures focussed on fashion, food and manufacturing. He also invests in early-stage companies through Augment Ventures. Servaia is managing director of White Cliff Tea, the largest contract packer for Tata Global Beverages in India.

The fund was formed using the founders’ personal money.

“From 2017, we want to dig deeper into AI and fintech. These are the two sectors where we think we can add substantial value to our portfolio companies,” Arpan said.

The company would invest Rs 10 lakh to Rs 50 lakh in early-stage companies. It wants to make up to 10-15 investments with the first fund, averaging about Rs 20-30 lakh and wants to support at least two more startups this year.

Virtu is planning to raise its second fund worth around $5 million by the end of 2018 and start investing from the new fund from mid-2019. Unlike the first fund, the company has decided to open up the second fund to external limited partners (LPs).

Arpan said the frequency and number of investments will be more with the new funds. The company is unlikely to make any investments in offline real estate projects.

“We wanted to keep the first fund small and make sure that the value we are adding is substantial. We only wanted to involve external money only when we are confident,” he said.

The fund would focus on startups offering AI solutions in finance, education, agriculture and manufacturing sectors, especially in tier II and III cities, targeting people who are conventionally not the targets for tech companies.

“We are seeing the emergence of more product companies focusing on consumers. Fintech is one exciting domain where a lot of interesting companies are emerging, in terms of innovative tools allowing people to allocate, invest and spend money smartly. Then there are many core fintech companies offering lending and payment solutions,” Arpan said.

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