Adding to the list of outside-India VCs hustling in to invest in India’s booming startup economy is Manish Kheterpal led Waterbridge Ventures. Kheterpal has announced (via DealStreetAsia) that his firm is raising smaller funds which will be used to invest in early stage startups. According to reports, the funds being raised will be just under $10 million, and will make 10-15 investments in early stage startups.
That being said, the average ticket size will be $300,000- $600,000 with a VC-kind of value-added approach in technology and technology-enabled sectors.
There is definitely momentum in this space. There are VCs that are very happy to do half a million dollars round all the way to $30 million. VCs can hire a few more people and invest at very early stage. Even if they hit the jackpot in 1 out of 10 deals, the returns are still supersized on that. Why should anyone miss out on that opportunity,
Kheterpal told DealStreetAsia.
This fresh capital being raised by Kheterpal is the firm’s second funding round. The first close of the firm was just a couple months ago valuing the company about $7 million so far. According to the venture company, the fund will be invested in analytics decision making solutions, e-commerce and transportation. These sectors have been receiving massive funding lately.
If you look at the eco-system in India, the biggest fall-out rate is between angel syndicate rounds and Series A funding. So the market is not deep and we thought that there is an opportunity for venture capital-style value addition in early stage.
For all the over-funding in these two sectors, what got left behind are companies that focus on these companies to either make their cost or pricing or supply side more efficient. These are not small opportunities anymore, and we are looking at a couple of those.
Kheterpal has been acting as an angel investor for several years now, primarily investing in startups in India and occasionally in the US. He focuses mostly on tech firms (like virtual reality and adaptive reality space). His Indian investments include bike taxi service Baxi, and online education company Edukart.
According to Kheterpal, you don’t need to build everything. He says that if you are providing a solution on solving the SME efficiency gap, you need not build an analytics model from scratch. Instead you could just use an existing solution and modify it according to your requirements. He also adds that his company doesn’t aim to solve global crisis. On the contrary, he will focus on the local side.
I’m not looking for global solutions from India. That is a big challenge and the risk-return would not be as much developing from India,
Already a prolific investor in India’s booming startup economy, Kheterpal has been an investor in the recent two-wheeler taxi phenomenon within the country, with his undisclosed investment into Baxi. Kheterpal had earlier invested in EduKart as well.