Mumbai: With his investments in several startups, Tata Group patriarch Ratan Tata may have sparked off a trend of a new class of investors in startups.
However, more high-networth individuals need to join the startup ecosystem, feel experts.
There are just 50-60 high net individuals (HNIs) throughout India investing in startups in India. More people should this investor class to give a fillip to startup space in the country, says Bhaskar Majumdar, managing partner, Unicorn India.
Unicorn India’s Sebi-approved fund taps a hitherto untapped class of old industrial families that are not tech suave but are interested in investing the exciting startups. But they don’t know how and where to invest.
They have little or no exposure to the startup as an asset class. Unicorn have got 10-12 such families to contribute Rs 20 crore out of the total capital of Rs 40 crore in first round of funding. Unicorn has a Sebi-approval to raise Rs 100 crore for the fund.
Mr Majumdar says that Mr Tata’s investments have aroused a lot of interest amongst this industrial class. It is estimated that the investible funds of the investors that Unicorn tapped could be Rs 60-70 crore which is hardly five per cent of their total investible funds.
Going by this figure, there could be Rs 1,000 crore investible funds waiting to be tapped. Globally, HNIs and other investors deploy five to eight per cent of their portfolio in startups.
According to Mr Majumdar, “We are quite clear about the kind of startups and teams we want to engage with. We prefer to invest in a company which has more than one founder. However, we don’t involve ourselves in the day-to-day operations of a company as we believe founders should be in the driving seat making all big decisions. We are their sounding board and a guide.”
Unicorn India has been structured as a hybrid fund whose first investment will enable start-ups with an seed round in the range of Rs 50 lakh to a crore, which would help companies build businesses and get ready for next round (Series A).
Mr Majumdar said they will use 30 per cent of the total raised amount to create a portfolio of 30 companies in three years and will back the potential winners by participating in Series A funding too.
