Menlo Park based venture capital firm Storm Ventures, has announced that it is allocating $10 million into a new fund for Indian SaaS start-ups. Storm Ventures is also keen on raising the amount if required, to further fuel ideas in this particular domain.
The capital allocated for the SaaS fund will be channelized through the $180 million fund raised by Storm Ventures last year.
The VC firm’s decision to support the Indian start-up ecosystem comes days after Prime Minister, Narendra Modi pitched new initiatives aimed for the start-ups by launching ‘Start-up India’. One of the key factors — beneficial for both funds like storm Ventures and startups — Government assistance in both cash and kind to accelerate fund allocation to startups
Through the SaaS fund, Storm Ventures will invest in those start-ups that have a yearly run rate between $1 million to $10 million. Storm Ventures will finance these start-ups through seed and Series A round funds.
The VC firm stated that India’s start up story has been phenomenal and at present has a high potential for growth. Comparing the start-up sector of India and China, the firm stated that India is currently in the same place, where the Chinese start up sector existed five to seven years ago. This potential for growth is what propelled Storm Ventures to invest into the Indian start up sector, it added. Storm Ventures is keen on investing in the start-ups that support the established e-commerce sector. It also expressed interest in investing into the payment services sector in India.
The launch of Start-up India has definitely eased flow of investments from VC firms across the globe. As pointed out by Storm Ventures, the Start-up India initiative made it that much easier to set up a SaaS fund in the country. The government has promised various perks such as levy on tax on capital gains for investors, which will aid in investments into the start-up sector.
Entrepreneurs are now excited about the potential of India. There is a feeling in Silicon Valley that the government of India understands start-up ecosystems and is making it easy to do business in India,
stated the company adding that it hopes to search for India’s Zendesk or Salesforce in the country.
The most interesting thing to me is how people from small towns have global ambitions now, which is something that I frankly didn’t see growing up in India. The world was so large that you didn’t dream of serving a customer in America when you were growing up in a mid-sized town in India.
Sharma, who is one of the five partners in Storm Ventures told TechCrunch.
India’s start up ecosystem is expected to reach $100 billion by the end of this decade. The propositions set forth by the current government, such as the Start-up India, will play a key role in shaping this sector.