Partnering with AISPL and Unilever Ventures, IDG Ventures India is launching the 2017 Innovation Program to reach out to startups.
Govt has to play a major role like it did with Aadhaar
When online fashion seller Myntra was acquired by Flipkart in 2014, the former’s early investor IDG Ventures India (IDGVI) went on to invest in Flipkart. The Flipkart-Myntra success story has since been written, and IDGVI has been on the lookout for bigger and better things.
With 65 companies in its portfolio, IDGVI is now launching the 2017 Innovation Program #IDGIP2017 to reach out to emerging startups across the consumer tech, software, health tech, and fintech spaces, in which they usually invest $500,000–$10 million. For this initiative, IDGVI is collaborating with Unilever Ventures (UV) and Amazon Internet Services Private Limited (AISPL), the Indian affiliate of Amazon Web Services (AWS).
Unilever Ventures, the venture capital and private equity arm of Unilever which offers equity investment and operational support, has a strategic relationship with IDGVI as an investor and will evaluate the companies part of this programme for potential co-investments.
Startups looking to raise seed or Series A rounds between $0.5 million and $5 million are invited for this programme. Shortlisted ones will receive technology mentorship from the AISPL team and value-added benefits like AWS credits, premium business support, and GTM connects.
According to Sudhir Sethi, Founder-Chairman, IDG Ventures India, “After the very successful 2016 Innovation Program, the 2017 edition expects to reach out to over 1,000 companies in the next two months and partner with/invest in select startups from Fund 3 to grow with IDG Ventures India’s unique growth platform.”
Plan till 2020
IDG Ventures had about 35–40 outbound programmes in nine years, focused on micro sectors. “We went out and looked for companies four–five times a year in specific sectors like SaaS, mobile, health, fintech, etc. Such programmes have given us very good companies,” says Sudhir.
In 2016, they wanted a larger scale and launched the Innovation Program 2016. Six companies—Little Black Book, Flyrobe, Active.ai, PipeCandy, Hansel.io, and Infisecure—were selected from close to 1,000 applications from startups. (Investment size varied from $0.5 million to $3.2 million depending on the stage of each of the selected companies.)
“The boundaries between sectors and companies, between B2C and B2B, are thinning down. So the second in the series is being launched to go where no one has ever gone before—to discover new technologies, new entrepreneurs who have the vision to disrupt the world. We plan to do this at least till 2020,” Sudhir tells YourStory.
As most investors do, IDG Ventures is also looking for startups solving problems specific to India. For instance, Sudhir says, to get benefits of GST automation is essential even in kirana stores.
“This humongous task can be solved only by young entrepreneurial companies. This includes how to work with India Stack, Aadhaar, non-wallet companies, etc.,” he explains. According to him, big data startup Peel-Works (which raised Series A from IDGVI in 2014) has already automated about 5,000 stores.
IDGVI’s portfolio has over 65 companies, including well-known brands like Flipkart, Yatra, Myntra, FirstCry, Newgen, Lenskart, Manthan, and NestAway. However, VCs are constantly challenged when it comes to identifying the right entrepreneurs, who know the pulse of the ground. But the right startup comes in a package.
“We want new products, market, technology, entrepreneurs, revenue model, and business model. What is disruptive today should be (potentially) disruptive tomorrow too. For us to get returns, they have to be disruptive five years from now too,” says Sudhir.
Claiming that last year’s programme has given rise to number-one players (though on a smaller scale), Sudhir says: “We are looking for a company which disrupts a big daddy. Flyrobe is disrupting every fashion retailer; Rentomojo will one day disrupt Bajaj Finserv. These companies will become number one on a larger scale in no time.”
IDG Ventures invested in vertical e-commerce more than seven years ago. Now they are investing in more disruptive business models—like Flyrobe—which follow an omnichannel strategy, the next step in the evolution of e-commerce.
Karan Mohla, executive director and head of digital consumer and media at IDG Ventures, says: “Two-thirds of our population is under the age of 45. Their buying behaviour is very different than those who are above 40, who have the largest spending power today. Those avenues of growth will continue.”
With a focus on fintech, SaaS, health tech, and consumer companies, IDG Ventures is careful about sub-categories. For instance, with this #IDGIP2017 programme, they are looking for security in Saas. Karan added that they are keen on companies driven by artificial intelligence, machine learning, and big data spaces, especially those in the early revenue stages.