Freshworks founder Girish Mathrubootham and Eka Software founder Manav Garg said on July 28 that they have launched Together, an $85 million venture capital fund that will back early-stage enterprise software startups.
The move brings together Mathrubootham- India’s most successful software startup founder in recent times- and other industry bulwarks to back software startups at a time when the market is booming, valuations are soaring, and investors are seeing huge payoffs on something they weren’t convinced about even 5-10 years ago.
SaaS: A hot favourite
Together’s founders however insist that it is not just a regular venture fund backing software-as-a-service entrepreneurs and looking for financial returns.
"To me, Together is not just a fund, it is a way to pay it forward to the startup community that gave me so much. With Together, we are not just offering capital to founders, we are offering our time and counsel as well. We have brought together a large network of more than 150 founders and operators across India and Silicon Valley to provide contextual help and guidance," Freshworks CEO Mathrubootham said.
He added that his personal ambition for the fund is not about making it the most successful VC firm but to make it the most founder-friendly, a sentiment that his founding partner Manav Garg echoes.
"In today's world, capital is a commodity. We don’t want to be an investor - we want to be like a co-founder. While we do want to deliver financial returns on our investments, that is secondary to our imperative to ensure that we do right by the founder at all times" Garg said.
He also said that both founders being active entrepreneurs themselves gives them perspective and an advantage that other software investors don’t have.
Mathrubootham is also a prolific angel investor, with more than 60 investments in startups including software firm Whatfix and edtech startup Unacademy. Going forward, however, he and the other partners won't be doing angel investments. Their fund will be separate and their historical investments will not be part of it.
Together has also roped in Shubham Gupta, who used to lead SaaS investments for venture capital firm Matrix Partners, as a founding partner. The fund has raised an initial corpus of $85 mn and its LPs or Limited Partners (individuals/institutions who invest in VC funds) include a network of founders, senior executives and investment firms.
It will invest from $250,000 up to $3 million in seed, pre-Series A or Series-A round and aims to become a startup's first institutional investor, that will not only fund the start-up but also guide its founders on building the product, achieve product-market fit and guide them on their go-to-market and customer acquisition strategy. It has already committed investments to 7 startups that are currently in stealth mode.
Avinash Raghava, who worked on community initiatives within the Indian startup ecosystem in organisations such as Nasscom, iSpirt and venture firm Accel, will lead Together community and culture initiatives.
The fund aims to capitalise on the enterprise cloud software boom underway globally and in India. India has over1000 SaaS companies, with 10 valued at over a billion dollars. These companies generate about $2-3 billion in total revenue and employ 40,000 people, according to a report from SaaSBOOMi, a community of SaaS founders and executives. The Indian SaaS ecosystem has the potential to create $1 trillion in value and nearly half a million jobs by 2030, the report added.The ecosystem could be further boosted by Freshworks’ public listing. Freshworks plans to list in the US later this year at a valuation of $8-10 billion, according to reports