The new fund, 100Unicorns Fund II, will also have a green shoe option of $100 Mn
100Unicorns cofounder Apoorva Ranjan Sharma said the new fund will follow the Y Combinator model in India and aims to provide support to startups right from the ideation stage
Around 60% of the fund’s corpus will be used to make first investments of $2,50,000-$3,00,000 in startups, while the remaining amount would be used for follow-on investments
Early stage VC fund 9Unicorns has rebranded itself to 100Unicorns and launched its second fund, 100Unicorns Fund II, with a corpus of $200 Mn to invest in 200 early stage startups.
In a statement, 100Unicorns said that the new fund will also have a green shoe option of $100 Mn.
Apoorva Ranjan Sharma, cofounder of 100Unicorns and managing director of Venture Catalysts, told Inc42 that the new fund will follow the Y Combinator model in India and aims to provide support to startups right from the ideation stage.
“We aim to become the Y Combinator of India and will follow its accelerator model… From the current $200 Mn fund, we have already invested into 4-5 startups across robotics, healthcare verticals and a new groundbreaking business model… (We) will look to invest across other industries such as EV, defence, D2C ecosystem, SaaS , travel, fintech and others,” Sharma said.
He said that most of the successful technology companies in the US were backed by Y Combinator and hence, it is imperative to have an accelerator in India on the similar lines which writes the first cheques for startups with strong business pitches.
“In the US markets, global VCs like Y Combinator have generated more than 200 unicorns in the past few years. 100Unicorns wants to tap into this existing market in India to create the next unicorns,” Sharma said.
The veteran investor said that around 60% of the fund’s corpus will be used to make first investments of $2,50,000-$3,00,000 in startups, while the remaining amount would be used for making follow-on investments of up to $3 Mn in portfolio startups.
“We typically will help the startups across the first three rounds of funding and as they scale and raise large growth capital, we will help them connect with large VCs,” Sharma added.
The fund also intends to use 15% of the fund capital to invest in startups based in the US, Middle East, Africa, and Asia.
Earlier, 100Unicorns (then 9Unicorns) closed its first fund at $100 Mn. It has invested in startups like VideoVerse, Trunativ, Zypp Electric, and Renee Cosmetics.
Overall, the early stage VC fund invested in more than 140 startups across sectors like fintech, deeptech, enterprise SaaS, fintech, media, insurtech, and D2C from the first fund. Nearly 70% of the capital committed in the first fund has been deployed so far.
It counts VC firms including Peak XV Surge, Y Combinator, A91 Partners, Motilal Oswal Private Equity, Matrix Partners, Yournest & Lightbox among its coinvestors.
Focus On Corporate Governance
At a time when the Indian startup ecosystem has been hit by a number of cases of corporate governance lapses and frauds, 100Unicorns has roped in law firm Nishit Desai & Associates to advise its portfolio companies on corporate governance, Sharma said.
“The issue of corporate governance cannot be ignored even in the early stages. The learning has been that even if you scale a company but its corporate governance is in shambles, it will suffer a fall. Hence, the focus is on roping in law firms for startups to establish a self-governance framework,” Sharma added.
The cofounder of 100Unicorns said that the new fund will also tie up with founders of various unicorns and soonicorns to mentor startups for building sustainable business models and getting the fundamentals right.
Responding to a question about the rising use of AI, Sharma said that AI has become an imperative tool for startups to adopt and will not fade away. “I strongly believe that AI is not a hype and is similar to the Y2K boom which changed the internet economy forever. So, from a VC perspective, it is definitely a part of our focus,” he added.
The launch of the new fund comes at a time when a number of new funds have been announced to invest in Indian startups, despite the ongoing funding winter. Just last week, Inc42 reported that GrowthCap Ventures is looking to close its maiden fund at INR 50 Cr in the next couple of months.
Last month, Caret Capital and Ev2 Ventures came together to launch a new $50 Mn fund to invest in early stage Indian startups. Recently, Norwest Venture Partners also closed its 17th fund, which has India as one of the focus markets, at $3 Bn.
