Nikhil Vora, former IDFC Securities' managing director and co-head of research, expects to close his maiden venture capital fund in the next three months raising money from domestic investors. His venture firm, called Sixth Sense Ventures, has already received approval from market regulator SEBI for the maiden fund.
The fund is looking to raise Rs 250 crore ($40 million) from a mix of high-net worth investors (HNIs), family offices, corporate houses and domestic institutions. The fund, which will target the broader consumption theme, will look at investing $1-5 million in both listed and unlisted companies.
"Globally the largest value creators, today and tomorrow, will come from ideas and not capital. While capital is a big differentiator, as can be seen from the Fortune 500 companies, the next league of leaders will be businesses which can create non-linear growth without soaking too much capital," Vora told VCCircle.
Vora believes that the way to reach the consumer is changing, as is evident by the growth in e-commerce. "We are not just looking to invest in consumption space, we are looking to invest in consumption centric space," he said.
While the consumption theme has been a favourite with private equity firms, most PE firms have been focused on deals over $10 million. Some of the firms which have been active in early stage investments in the consumer space include Kishore Biyani's Future Ventures (now Future Consumer) and more recently DSG Consumer Partners.
Sixth Sense Ventures will have an investment team led by Vora with operation and sector experts in its board of advisors and board emeritus. These will include promoters, corporate CEOs and other experts across its target sectors like consumer, pharmaceuticals, agriculture and technology.
Vora, who has personally been an active investor in private companies, said that he would look to replicate his success with Sixth Sense. "While I have held some of these investments for six-seven years, most of these businesses have been able to grow disproportionately and several have also attracted follow-on rounds from private equity investors," he said, adding that he has backed 15 such companies.
Some of his investments include Kangaroo Kids Education Ltd (KKEL), which runs Kangaroo Kids Preschool and Billabong High International School; Vini Cosmetics, an FMCG company which raised funding from Sequoia Capital India last year; sports-focused digital display solutions firm Technology Frontiers, backed by Avigo Capital and MRO AirWorks, backed by NEA and GTI Capital.
(Edited by Joby Puthuparampil Johnson)