Unicorn India Ventures, an early-stage venture capital fund focussed on business-to-business startups in the social media, analytics and cloud segment, has launched its maiden debt fund with a corpus of Rs 600 crore ($93 million).
The fund will look to invest in as many as 10 ventures in a year, with an average ticket size of Rs 20 crore. Its investment horizon will be 7-8 years, said Unicorn India Ventures chairman M Damodaran, former chief of capital markets regulator the Securities and Exchange Board of India (SEBI). “We will make the first round of investments in the first three years, followed by a second round in the next three years... and a harvesting period of about two years,” Damodaran explained.
Observing that venture debt was not very popular in the country, he said startups were starved of funds and the capital structure was lopsided.
JRG Securities group chairman Sudip Bandyopadhyay, who was formerly with Reliance Money and Destimoney Securities, has joined the fund as managing partner.
Debt will ensure cheaper capital for entrepreneurs, who do not have to bring down equity for funding, Unicorn's managing partner Bhaskar Majumdar said. "High levels of founder dilution, uncertain exit scenarios and limited financing options from banks and NBFCs have made debt financing need of the hour for the startup ecosystem,” Majumdar added.
A SEBI-registered VC fund, Unicorn India Ventures was founded in early 2015 by Anil Joshi and Majumdar.
Prior to launching the fund, Joshi headed operations at Mumbai Angels and Bangalore Angels. He has also held several portfolios at companies such as Century Rayon, BK Birla Group Company and Transasia Biomedical Ltd, and led new projects and investments in startups with telecom, IT and energy-focused Artheon Group.
Unicorn India Ventures floated its maiden fund worth Rs 150 crore ($23 million then) in 2015, with an aim to build a portfolio of 30 companies. Out of that fund, it has invested in Boxx.ai, GrabonRent, Inc42, NeuroEquilibrium, Pharmarack, Sequretek, SmartCoin, and VanityCube among others.
In December 2015, the fund hit its first close at Rs 40 crore ($6 million) against its original plan of Rs 60 crore.