Apart from the mobile Internet space, Blume will also look at investing in IoT and other innovation-led tech startups, shares Nath, in an exclusive chat with e27.
The Indian startup eco-system is evolving at a fast pace with positive sentiments in the country post General Elections. The macro-economic situation is changing due to several initiatives taken by the new Government. Three years ago, there were fewer startups emerging out of the country due to lack of infrastructure; however, a lot has transformed due to greater Internet penetration and rapid adoption of smartphones in the country.
India-tech is seeing more exits, with stalwarts such as Flipkart, InMobi and Mu Sigma entering the billion-dollar club within the last three years, and their founders becoming role models for Gen X entrepreneurs.
According to New York-based research firm CB Insights, India could overtake China in the final quarter of this calendar year in the amount of technology investments committed by VC and PE firms. With Japan’s Softbank announcing a US$10 billion investment plan in India, it is estimated that the quantum of investments committed to India will be higher than China.
It’s exciting to be an entrepreneur in India with several partners in the ecosystem ready to support great ideas. “India’s time is here. Today’s new tech role models are the founders of Flipkart, Inmobi, Snapdeal, Mu Sigma – and many others. Entrepreneurs have a similar degree and work experience like these role models, and if they are convinced about a compelling pain point, then they don’t shy away from solving it. We want Blume to be one of the first ports of call where they come to share their ideas, dreams and passion. If those ingredients are in the package, we’re here to engage and help,” said Sanjay Nath, Co-founder and Managing Partner, Blume Ventures.
In 2011, Blume took the initiative to help build the ecosystem by supporting early-stage startups. The maiden fund had a total corpus of US$23 million. As it prepares to launch its second fund, Nath delves deeper into the firm’s investment strategy.
“The idea is to launch the fund by early next year with a corpus of US$60 million. As opposed to first check sizes of US$100K – US$250K earlier, we will now invest upto US$500K in the seed-stage. We will continue to back companies at a seed stage but with deeper engagement,” said Nath.
“We are not a typical private equity investor where we necessarily need to own the lion’s share. We will continue to selectively bring in value-added angels. The core thesis is to back the companies deeper through Series A, still partnering with VCs at later stages,” he added.
With the new fund, besides the core mobile Internet space, Blume will also look at investing in areas such as IoT (Internet of Things) and other tech innovation-led startups.
It plans to move away from the syndicate model and instead be a co-lead or lead investor in most of the investments. “We believe in backing companies with more conviction. We would like to co-invest and bring value-add via people,” he said.
“Startups need real-time help — we think the best way is by adding teams of experts and venture advisors in specific domains and geographies who can get connected to three-four startups and help them grow,” said the Co-founder.
Blume has also created a platform with allied partner companies to portfolio startups with basic accounting, legal and finance back-office functions (such as contract negotiations, restructuring, ESOPs, etc). There are also partners assisting the portfolio to raise next funding rounds, marketing / branding, and recruiting / talent development.
“This helps in minimising cost and saving time. Our entrepreneurs can purely concentrate on building product and accelerate go-to-market efforts, with ancillary services being handled by our allied partners,” he shared.
Blume Ventures is expanding its linkages to Southeast Asia and to the Silicon Valley to help the portfolio companies gain deeper penetration. “We want to be known as an Indian tech VC with a global outlook. We’re seeing many portfolio companies actively explore and expand into Singapore, Malaysia and Indonesia, which have many parallels and similarities to Indian demographics. We’re also glad to partner with like-minded regional VCs there,” concluded Nath.
Post republished from e27.co