The high-risk, early-stage funding space continues to see a lot of action. IndiaCo, a BSE-listed private equity firm, has floated a hybrid venture capital company poised to incubate and fund startups. Dubbed Incucapital, the early stageVC fund is meant to provide capital and resources to get an idea off the ground. In addition to providing basic infrastructure for startups, it is also raising an early stage fund for seed capital investments. "We are raising a Rs 2-crore fund," Manish Kumar, CEO, IncuCapital, tells VCCircle.
IndiaCo will provide anchor commitments to the fund which is tapping domestic HNIs to raise commitments. "The fund-raising is coming along well." Sharma adds that they are already in talks with a few companies and should be able to fund two-three ventures by the end of this month. All these investments will be done in a syndication or a co-investment round with other organized angel funding groups - Mumbai Angels and Indian Angel Network. IncuCapital will be fairly sector agnostic in its investment approach.
The Edge Factor
IncuCapital has been founded by first generation entrepreneurs Manish Kumar and Surojit Nandy, who understand the pitfalls that early stage ventures face. While there are many startup incubators throughout the country, IncuCapital takes the idea a step further by creating formalized links between the incubators rather than leaving them to function in isolation. The early stage firm is in the process of setting up base incubators in various professional institutions in different domains like B-Schools, engineering, medicine, pharma and even niche domains like law and hotel management etc to help startups across industry domains get incubation support in the right institute.
"It is very important for these startups to thrive in a relevant, domain-specific environment. It provides them with right kind of resources and a more meaningful ecosystem. A clinical research startup is more likely to benefit from a medical college incubation centre than just any other infrastructure set up," Kumar adds.
He explains the rationale further by saying that it is not about infrastructure leasing, but adding the right kind of value at every step.
When such startups build credible validation, IncuCapital will consider funding them. The firm will take equity stakes in companies in exchange of incubation support. The three-month-old venture is currently expanding its network of incubators across the country by partnering with various external institutions--such as universities, corporate mentors, and government agencies.
It has already established five chapters in India - Delhi, Mumbai, Bangalore, Pune, Hyderabad and a soon-to-be launched chapter in Chennai. A confident Kumar says that they will launch a $10-million early stage fund by November.
There have been a spate of launches by early stage investors in India such as Seeders which is replicating the Y-Combinator model in India, Morpheus Venture Partners, which invests about Rs 5 lakh in a startup, and GrowVC, a crowd funding programme. Besides these firms, there are also established angel investing groups like Mumbai Angels, Chennai Fund and Indian Angel Network.