To help startups at the grassroots level rise up the ranks, and provide them much needed growth capital, prominent angle investor Utsav Somani, has now announced the launch of his new $15 million micro-fund iSeed II. It is set to support more than 50 Indian start-ups with knowledge and capital and help them get access to Silicon Valley. This will benefit both sides – Silicon Valley investors and entrepreneurs will have a pool of promising and young Indian founders, while Indians will receive knowledge, understanding, and exposure to the wider world.
iSeed is a micro-venture capital fund and the largest GP fund in the country, and iSeed II is set to enhance its own investments in the start-up ecosystem.
According to Somani, the LPs (limited partners) in iSeed II were carefully selected “based on their knowledge and willingness to help portfolio founders scale.” New LPs included Prasanna Sankar, co-founder of employee management unicorn Rippling, Lachy Groom, a former executive of payments major Stripe; Ankur Nagpal, founder and chief executive officer (CEO) of ed-tech startup Teachable. The $15 million was raised from global funds like RTP Global, KAMCO Jedi Fund, CM Ventures, FJ Labs, and Tribe Capital.
“I think the ecosystem is robust. There is quality talent. There is liquidity that is coming in now across IPOs and late-stage startups. Overall, the ecosystem has now come of age where we are finally on the map and people are taking India more seriously,” Somani said.
“Through iSeed, India’s largest solo GP-micro fund, I want to bring the era of solo-capitalists and emerging fund managers or micro-VCs to India to better serve our Indian start-up founders. The goal is to have the weight and heft of an institution like seed-stage VC firm First Round Capital at the earliest stages for Indian founders with the size of an angel cheque,” he added.
The iSeed II comes less than a year after the launch of iSeed I last May, which raised around $5 million. To date, iSeed has invested in nearly 36 start-ups. iSeed I had co-invested with top tier funds such as Founders Fund, Sequoia Capital India, and Lightspeed Venture Partners in companies including Pepper, Dive, FloBiz, Velocity, BimaPe, PagarBook, Qoohoo, and Zoko.
Apart from AngelList founder Naval Ravikant, other big backers of iSeed include Jack Herrick, founder and CEO of wikiHow, and Bryce Maddock, co-founder, and CEO of TaskUs.
2021 has been a bountiful year for start-ups in India – they have raised around $3.76 billion this year, which is significant progress when compared to $3.5 billion being raised through the entirety of 2020. Gaming company Nazara Technologies made a strong stock market debut this year as well, with its IPO being subscribed nearly 176 times and listing at nearly 81% premium over the issue price. Somani’s view of the next decade belonging to the founders of Indian start-ups is thus not unfounded, and iSeed II is expected to play a big role in investing in tech-based start-ups over the next two years.