S Mobasheer and Dr G. Praveen Kumar, International Journal Of

Home , Unitus Seed Fund

S Mobasheer and Dr G. Praveen Kumar, International Journal of Research in Engineering, IT and Social Sciences, ISSN 2250-0588, Impact Factor: 6.452, Volume 08 Issue 06, June 2018, Page 244-249 A Conceptual Overview of Venture Capital Firms in India

S Mobasheer1 and Dr. G. Praveen Kumar2 1(Research Scholar in Management, Rayalaseema University, Kurnool, AP, India) 2(Research Supervisor, Rayalaseema University, Kurnool, AP, India) Abstract: Venture Capital is a private or institutional investment made into early-stage / start-up companies. As defined, ventures involve risk in the expectation of a sizeable gain. Venture Capital is money invested in businesses that are small; or exist only as an initiative, but have huge potential to grow. The people who invest this money are called venture capitalists (VCs). The objective of the study is to examine the conceptual overview of venture capital firms in India. There are as many as 47 venture capital funded firms in India and these companies issue funds for majority of the startup companies like bank of baroda, flipkart, yatra etc,. It is concludes that growth of the county depending up on the financial status of the county which indeed supported by the venture capital firms.

Venture Capital It is a private or institutional investment made into early-stage / start-up companies. As defined, ventures involve risk in the expectation of a sizeable gain. Venture Capital is money invested in businesses that are small; or exist only as an initiative, but have huge potential to grow. The people who invest this money are called venture capitalists (VCs). The venture capital investment is made when a venture capitalist buys shares of such a company and becomes a financial partner in the business. Venture Capital investment is also referred to risk capital or patient risk capital, as it includes the risk of losing the money if the venture doesn’t succeed and takes medium to long term period for the investments to fructify. Venture Capital typically comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms. It is the money provided by an outside investor to finance a new, growing, or troubled business. The venture capitalist provides the funding knowing that there’s a significant risk associated with the company’s future profits and cash flow. Capital is invested in exchange for an equity stake in the business rather than given as a loan. Venture Capital is the most suitable option for funding a costly capital source for companies and most for businesses having large up-front capital requirements which have no other cheap alternatives.  Features of Venture Capital investments  High Risk  Lack of Liquidity  Long term horizon  Equity participation and capital gains  Venture capital investments are made in innovative projects  Suppliers of venture capital participate in the management of the company The Funding Process The venture capital funding process typically involves four phases in the company’s development: Step 1: Idea generation and submission of the Business Plan The initial step in approaching a Venture Capital is to submit a business plan. The plan should include the below points:  There should be an executive summary of the business proposal  Description of the opportunity and the market potential and size  Review on the existing and expected competitive scenario  Detailed financial projections  Details of the management of the company  There is detailed analysis done of the submitted plan, by the Venture Capital to decide whether to take up the project or no. Step 2: Introductory Meeting Once the preliminary study is done by the VC and they find the project as per their preferences, there is a one-to-one meeting that is called for discussing the project in detail. After the meeting the VC finally decides whether or not to move forward to the due diligence stage of the process.

http://indusedu.org Page 244

Step 3: Due Diligence The due diligence phase varies depending upon the nature of the business proposal. This process involves solving of queries related to customer references, product and business strategy evaluations, management interviews, and other such exchanges of information during this time period. Step 4: Term Sheets and Funding If the due diligence phase is satisfactory, the VC offers a term sheet, which is a non-binding document explaining the basic terms and conditions of the investment agreement. The term sheet is generally negotiable and must be agreed upon by all parties, after which on completion of legal documents and legal due diligence, funds are made available. Types of Venture Capital funding The various types of venture capital are classified as per their applications at various stages of a business. The three principal types of venture capital are early stage financing, expansion financing and acquisition/buyout financing. The venture capital funding procedure gets complete in six stages of financing corresponding to the periods of a company’s development  Seed money: Low level financing for proving and fructifying a new idea  Start-up: New firms needing funds for expenses related with marketing and product development  First-Round: Manufacturing and early sales funding  Second-Round: Operational capital given for early stage companies which are selling products, but not returning a profit  Third-Round: Also known as Mezzanine financing, this is the money for expanding a newly beneficial company  Fourth-Round: Also called bridge financing, 4th round is proposed for financing the "going public" process A) Early Stage Financing Early stage financing has three sub divisions seed financing, start up financing and first stage financing. Seed financing is defined as a small amount that an entrepreneur receives for the purpose of being eligible for a start up loan. Start up financing is given to companies for the purpose of finishing the development of products and services. First Stage financing: Companies that have spent all their starting capital and need finance for beginning business activities at the full-scale are the major beneficiaries of the First Stage Financing. B) Expansion Financing Expansion financing may be categorized into second-stage financing, bridge financing and third stage financing or mezzanine financing. Second-stage financing is provided to companies for the purpose of beginning their expansion. It is also known as mezzanine financing. It is provided for the purpose of assisting a particular company to expand in a major way. Bridge financing may be provided as a short term interest only finance option as well as a form of monetary assistance to companies that employ the Initial Public Offers as a major business strategy. C) Acquisition or Buyout Financing Acquisition or buyout financing is categorized into acquisition finance and management or leveraged buyout financing. Acquisition financing assists a company to acquire certain parts or an entire company. Management or leveraged buyout financing helps a particular management group to obtain a particular product of another company. Advantages of Venture Capital  They bring wealth and expertise to the company  Large sum of equity finance can be provided  The business does not stand the obligation to repay the money  In addition to capital, it provides valuable information, resources, technical assistance to make a business successful Disadvantages of Venture Capital  As the investors become part owners, the autonomy and control of the founder is lost  It is a lengthy and complex process  It is an uncertain form of financing  Benefit from such financing can be realized in long run only Objectives of the study The objective of the study is to examine the major venture capital firms in India and to study the firms funded by these banks. http://indusedu.org Page 245

Major Venture Capital firms in India: Helion Venture Partners Investing in technology-powered and consumer service businesses, Helion Ventures Partners is a $605 Mn Indian-focused, an early to mid-stage venture fund participating in future rounds of financing in syndication with other venture partners. The major Industries invested include Outsourcing, Mobile, Internet, Retail Services, Healthcare, Education and Financial Services. The startups funded by this venture capital firms includes Yepme, Make my trip, Net Ambit, Komli, Taxi for sure, PubMatic. Accel Partners Accel Partners founded in 1983 has global presence in Palo Alto, London, New York, China and India. Typical multi-stage investments in internet technology companies are made by Accel partners. The major Industries invested include Internet and Consumer Services, Infrastructure, Cloud -Enabled Services, Mobile and Software. The startups funded by this venture capital firms includes Flipkart, Babyoye, Freshdesk, Bookmyshow, Zansaar, Probe, Myntra, CommonFloor. Blume Ventures Venture capital firm, Blume Venture Advisor funds early-stage seed, startups, pre-series A, series B and late stage investments. Blume backs startups with both funding as well as active mentoring and support. The major Industries invested include Mobile Applications, Telecommunications Equipment, Data Infrastructure, Internet and Software Sectors, Consumer Internet, Media, Research and Development. The startups funded by this venture capital firms includes Carbon Clean Solutions, EKI Communications, Audio Compass, Exotel, Printo. Sequoia Capital India Sequoia Capital India specializes in investments in startup seed, early, mid, late, expansion, public and growth stage companies. The major Industries invested include Consumer, Energy, Financial, Healthcare, Outsourcing, Technology. The startups funded by this venture capital firms includes JustDail, Knowlarity, Practo, Iyogi, Bankbazaar. Nexus Venture Partners Nexus Venture Partners is a venture capital firm investing in early stage and growth stage startups across sectors in India and US. The major Industries invested include Mobile, Data Security, Big Data analytics, Infrastructure, Cloud, Storage, Internet, Rural Sector, Outsourced Services, Agribusiness, Energy, Media, Consumer and Business services, Technology. The startups funded by this venture capital firms includes Snapdeal, Housing, Komli, ScaleArc, PubMatic, Delhivery. Inventus Capital Partners With the sole goal of making new entrepreneurs successful, Inventus is a venture capital fund managed by entrepreneurs and industry-operating veterans. The major Industries invested include Consumer, Hotels, Restaurants and Leisure, Media, Internet and Catalog Retail, Healthcare, Information Technology, Hardware and Equipment, Telecommunications etc. The startups funded by this venture capital firms includes Poshmark, Policy Bazaar, Insta health Solution. IDG Ventures Having a global network of technology venture funds with more than $4 billion, IDG Ventures India is a leading India-focused technology venture capital fund specializing in startups, early stage, growth stage and expansion stage companies. The major Industries invested include Digital Consumer – Internet, Mobile, Media and Technology Enabled Consumer Services, Enterprise Software – SaaS, Software Products and Enterprise services, Engineering – Medical Devices, Clean-tech and IP-led Businesses. The startups funded by this venture capital firms includes UNBXD, Yatra.com, Myntra, Firstcry, Ozone Media. Naspers Naspers is a leading multinational media group, incorporated in 1915 as a public limited liability company and was listed on the Johannesburg Stock Exchange (JSE) in September 1994. The group’s principal operations are in internet platforms (focusing on commerce, communities, content, communication and games), pay-television and the provision of related technologies and print media (including publishing, distribution and printing). The group’s most significant operations are located in South Africa and elsewhere in Africa, China, Central and Eastern Europe, India, Brazil, Russia, Thailand and the Netherlands. The major Industries invested include Ecommerce, Print Media, Pay Television. The startups funded by this venture capital firms includes OLX, Flipkart. Steadview Capital Steadview is a leading alternative asset manager based in Hong Kong. The firm makes concentrated long-term investments across multiple industries. Early Stage Venture and Later Stage Venture are included in Investment and it includes Ecommerce. The startups funded by this venture capital firms includes Olacabs, Flipkart, Saavn, Urban Ladder

http://indusedu.org Page 246

Jungle Ventures Jungle Ventures is a Singapore based, entrepreneur backed venture firm that funds and helps startups scale across Asia Pacific. It invests in global startups that are solving problems relevant to Asia Pacific markets. It currently has investments in US, Singapore, India, Australia, Thailand, Malaysia, and the Philippines. The major Industries invested include Ecommerce, Digital Media, Saas, Fintech, Big Data, Analytics, Enterprise. The startups funded by this venture capital firms includes Zipdial, Ekstop, Pokkt, Milaap. Zodius Capital Operational since 2011, Zodius typically develops one company every six months and works intensively with its portfolio company teams to “speed up” and “shape up” for exceptional growth and profitability. The major Industries invested include Big Data and Analytics, Digital Media and Commerce, Education. The startups funded by this venture capital firms includes BigBasket, Culture Machine Qualcomm Ventures Qualcomm Ventures is the investment arm of Qualcomm Inc, a Fortune 500 company with operations across the globe. The major Industries invested include Business Software, Cloud/Enterprise, Consumer Software, Hardware, Health Care, Infrastructure, Semi/Components. The startups funded by this venture capital firms includes Appsdaily, Capillary, Deck, Portea, Housing Warburg Pincus Warburg Pincus is a leading global private equity firm focused on growth investing. The firm has more than $37 Bn in assets under management. Its active portfolio of more than 120 companies is highly diversified by stage, sector and geography. The major Industries invested include Consumer, Industrial and Services, Energy, Financial Services, Healthcare, Real Estate, Tech, Media, Telecommunications. The startups funded by this venture capital firms includes Lemon Tree, Biba, Quikr. Canaan Partners Global venture capital firm investing in people with visionary ideas, Canaan Partners specializes in all stages of development, seed financings, start-ups, growth and early stage investments, typically Series A and B financings. The major Industries invested include Technology- Advertising & Marketing, Big Data/Cloud, Consumer, Enterprise/SaaS, FinTech, Hardware, Healthcare – Biopharma, digital Health & MedTech. The startups funded by this venture capital firms includes Naaptol, Bharat Matrimony, Happiest minds, CarTrade, Surewaves. SAIF Partners Investing in India since 2001, SAIF Partners specializes in private equity and venture capital across Asia. The major Industries invested include IT, ITes, Industrials, Financial Services, Internet, Consumer Product, Mobiles. The startups funded by this venture capital firms includes Justdial.com, Paytm, Network18, HomeShop18, Book My Show. Ascent Capital Advisors Ascent Capital, an India-focused independent private equity firm, is among the most experienced teams on ground with over 150+ years of collective experience in Indian capital markets. The major Industries invested include Technology, Ecommerce, Healthcare, Financial Services, Consumer Brands and Infrastructure. The startups funded by this venture capital firms includes Bigbasket.com, KIMS Axon Partners Group Specialized in global emerging markets, the Group prefers to invest in technology focused companies in countries like Latam, Spain and India. The major Industries invested include Games, Software, Security, Biotechnology, Telecommunications. The startups funded by this venture capital firms includes ByHours.com, Hot Hotels. Bain Capital Private Equity Bain Capital professionals in aggregate is the largest investor in every fund raised. Bain Capital, along with management teams, provides the strategic and analytic resources needed to build and grow great companies. The major Industries invested include Consumer, Retail and Dining, Financial and business Services, Healthcare, Industrial and Energy, Technology, Media and Telecom. The startups funded by this venture capital firms includes ASIMCO, BMC Software, Biglobe, Atento, BPL. Basil Partners It’s a Venture Capital fund involved in Early Stage Venture Investments focusing on investing in India besides investing in North America, Europe and Asian Countries. The major Industries invested include IT & ITes. The startups funded by this venture capital firms includes Endeavour Software Technologies, Karmic LifeSciences. Battery Ventures Battery Ventures is based in Boston, Silicon Valley and invests in technology driven companies. With over 30 years of experience, this VC fund has deep pockets. The major Industries invested include e-Commerce and Retail Digital Media, Industrial Technologies, Infrastructure, Software and Services. The startups funded by this venture capital firms includes HackerRank, AppDynamics. http://indusedu.org Page 247

Bessemer Venture Partners With great experience in investing, this 1911 founded company operates on a global scale with offices located in Israel, India and both coasts in the US. The major Industries invested include Cyber Security, Financial Services, Mobile, Cleantech Cloud Computing. The startups funded by this venture capital firms includes Snapdeal, OnMobile. Forum Synergies (India) PE Fund The company’s vision and mission is to be a unique, ethical private equity fund management model in India that provides investors with a best-in-class private equity model. The major Industries invested include Healthcare, Automotive, Electronic Hardware, Electrical Equipment, Chemical Engineering, Medical Devices, Pharmaceuticals, Biotechnology, IT. The startups funded by this venture capital firms includes Zomato, Ola, Quikr, Taxiforsure, Freecharge, Housing. Fulcrum Venture India Founded in 2000, Fulcrum is a private equity investor which focuses on the SME business opportunities. They prefer to invest in like-minded entrepreneurs with solid principles and objectives. The major Industries invested include Education, Financial Services, FMCG, Healthcare, Niche Retail. The startups funded by this venture capital firms includes Shield Healthcare Private Limited, SwaaS Systems, Congruent Solutions Pvt Ltd General Atlantic LLC It is the leading global growth equity firm providing capital and strategic support for growing companies. It does Early Stage Venture, Later Stage Venture and Private Equity Investments. The major Industries invested include ECommerce, Software, Fashion, Cloud Computing, Curated Web. The startups funded by this venture capital firms includes Vox Media, Klarna, Citiustech, Squarespace. Intel Capital The firm focuses on mergers, acquisitions, and equity investments related to tech startups. Till date, it has invested $10.7 Bn in over 1,250 companies in 52 countries. The major Industries invested include Internet- Digital Media, Manufacturing-Labs, Security, Smart Phones-Tablets, software and Services, Ultrabook- Perceptual Computing, Wearables. The startups funded by this venture capital firms includes Gigya, Hungama, Snapdeal Kae Capital Kae Capital invests in those companies which bring out innovative solutions for existing gaps in the markets.They believe in identifying and building large companies even from a concept. The major Industries invested include Mobile, Ecommerce, Education, Healthcare, Consumer, Internet. The startups funded by this venture capital firms includes SysCloud, ShepHertz, FortunePlay, Nuiku, Shopsense. Kalaari Capital With a strong advisory team in Bangalore, Kalaari is a $160 Mn venture capital fund investing in early- stage technology-oriented companies in India. They seek companies that are capable of capturing new markets, providing innovative solutions and creating new wealth for India and beyond. The major Industries invested include ECommerce, Internet, Curated Web, cleantech. The startups funded by this venture capital firms includes Mettl, UrbanLadder, Snapdeal, Zivame. Matrix Partners India Mumbai Based Matrix Partners was founded in 1977, and is committed to build long-term relationships. With capital over INR 3000 Cr., they invest across sectors in India. The major Industries invested include Internet, Consumer internet, eCommerce, Travel, Internet, Consumer Internet, eCommerce, Travel, etc. The startups funded by this venture capital firms includes NewsHunt, Quikr India, LimeTray, Hearing Plus, Ola, WeAreHolidays. Mayfield Fund One of the oldest Venture Capital Firms focusing on early-stage to growth-stage investments in information technology companies, in particular on enterprise software, Internet consumer & media services, and communications. The major Industries invested include Consumer Services, Infrastructure Ancillaries, Healthcare Services, Manufacturing Opportunities. The startups funded by this venture capital firms includes Gigya, Lantern, India Property NewPath Ventures, LLC New Path Ventures, LLC is a venture capital firm which specializes in seed stage, startups, and early stage investments. They prefer to invest in technology based startups in India and US. The major Industries invested include Semiconductors, Curated Web. The startups funded by this venture capital firms includes Telsima, inSilica, Montalvo Systems Norwest Venture Partners NVP is an India-centric multi-stage investment firm that has partnered with entrepreneurs to build great businesses for more than 50 years. The major Industries invested include Internet, telecommunications, financial http://indusedu.org Page 248

This work is licensed under a Creative Commons Attribution 4.0 International License S Mobasheer and Dr G. Praveen Kumar, International Journal of Research in Engineering, IT and Social Sciences, ISSN 2250-0588, Impact Factor: 6.452, Volume 08 Issue 06, June 2018, Page 244-249 services, and education sector. The startups funded by this venture capital firms includes Indus ind Bank, Komli, Fashionandyou.com. SIDBI Venture Capital Limited It focuses on life sciences, clean technology, retailing, light engineering, food processing, information technology, infrastructure related services, healthcare, logistics and distribution, water and sanitation, agriculture, and education sectors. The major Industries invested include Ecommerce, Semi Conductors. The startups funded by this venture capital firms includes Print land, Circuit Sutra Technologies, Skelta Software Unitus Seed Fund Unitus Seed Fund is a seed stage venture fund based in Bangalore and Seattle which invests in developing markets with primary focus on rural startups focusing on low income groups. The major Industries invested include Education and Skilling, Healthcare, Mobile Commerce, Marketplaces and E-Commerce, Agriculture, Retail and Distribution, Water and Energy. The startups funded by this venture capital firms includes Blowhorn, Addresshealth, mGaadi, Welcare, GoCoop,Medypal. Ventureast Fund Advisors India Limited It is India’s longest standing venture capital firm investing in innovative businesses across seed, early and growth stages. The major Industries invested include Internet of Things (IOT), Financial services, Consumer- driven & retail, Clean tech, Digital healthcare, Pharma & Life Sciences. The startups funded by this venture capital firms includes Little Eye Labs, Goli Vada Pav, Portea, 24 Mantra, Seclore.

CONCLUSION The growth of the county is depending upon the growth of the companies that are available in that particular country. Venture capital firms funded many companies and as result the GDP of the India is increasing. Venture capital firms are directly or indirectly supporting growth of the country.

REFERENCES [1] https://www.edupristine.com/blog/venture-capital [2] https://inc42.com/resources/top-47-active-venture-capital-firms-india-startups/ [3] Preqin. “Venture Capital in India”. Retrieved from https://www.preqin.com/docs/reports/Preqin-Venture-Capital-India- September-2015.pdf [4] Preqin (2016). “The 2016 Preqin Global Private Equity & Venture Capital Report”. Retrieved from https://www.preqin.com/docs/reports/2016-Preqin-Global-Private-Equityand-Venture-Capital-Report-Sample_Pages.pdf [5] Kaushik Preetam (2014). “ Rise of Venture Captial in India : Nothing Ventured, Nothing Gained”. Retrieved from http://www.businessinsider.in/Rise-Of-VentureCapital-In-India-Nothing-Ventured-Nothing-Gained/articleshow/38803554.cms. [6] “2015 sees highest-ever private equity investments in India”, http://www.livemint.com/Industry/DZYKCErQomg1vBKjrCfBDO/Private-equityinvestments-in-India-highest-in-2015- report.html, Retrieved on September 24th, 2016. [7] Venture Intelligence (2016). “Indian Private Equity Trend Report 2016”. Retrieved from http://www.ventureintelligence.com/downloads/pe-trend-report-2016.pdf [8] Securities and Exchange Board of India (2015). “Handbook of Statistics 2015”. Retrieved from http://www.sebi.gov.in/cms/sebi_data/attachdocs/1462441113708.pdf [9] McKinsey & Company - US Venture Capital Industry – Industry Overview and Economics (Summary Document), September, 1998 [10] I M Pandey – Venture Capital: The Indian Experience, New Delhi:Prentice Hall, 1996 [11] Rustagi RP (2001) 'Financial Management - Theory, Concepts and Problems', [12] Galgotia Publishing Company, New Delhi [13] www.sidbiventure.co.in/ [14] https://www.sequoiacap.com/india

http://indusedu.org Page 249

This work is licensed under a Creative Commons Attribution 4.0 International License