"There will be about 1 million startups and 1,000 unicorns in India by 2030 and we want to associate and work with 10%+ of these would-be unicorns. Unicorns are expected to add $1 trillion to the India economy by 2030.”
This is from a memo by a venture capital (VC) firm that has backed companies like logistics aggregator Shiprocket and green mobility player BluSmart.
To that end, the VC firm has even rechristened itself to ‘100Unicorns’. In its earlier avatar, it was called 9Unicorns — as it was launched at a time when India had fewer than 50 startups with more than a billion dollars in valuation.
Now, 100Unicorns (100U hereon) has launched a campaign to raise a $200 million corpus to invest in early stage companies in areas like defence, fintech, electric vehicles, health, SaaS and more.
It comes at a time when Indian startups have seen funding decline by around 65 percent to $9.5 billion in 2023.
Moreover, the country minted only 2 unicorns last year and 2 more have been created in the first five months of 2024. The tally stands at 106 currently, according to data from Venture Intelligence.
The firm will also set aside 10-15 percent of the money to back companies in other regions like Africa, the Middle East and North America.
100U aims to reach the first close of the fund at $100 million by November this year. First close is a stage when a fund secures enough investor commitments to start investing, although it typically does not mean that the money has hit the bank account.
“There is a demand for this asset class… A middle-eastern sovereign fund reached out to invest with us about 6-7 months ago. But, we were not ready yet back then,” says Apoorva Ranjan Sharma, co-founder and managing director of 100U.
Sharma is a veteran angel investor in India’s startup ecosystem and claims to have struck exits of 80X in fintech unicorn BharatPe and more than 250X in hotel aggregator OYO.
His motivation to start the venture firm was Silicon Valley-based YCombinator. “It is an investor in 17 percent of all unicorns globally… That is my inspiration and aspiration,” he says.
It does not bother him much that limited partners have been restrained globally in allocating funds to the VC asset class amid a tightening interest rate regime, which has also led to a ‘funding winter’ for startups.
In a memo shared by SoftBank with its investors, the Japanese technology investor said that the quarter ending December 2023 was the slowest quarter for venture capital in more than 6 years — with 6,200 deals and $51 billion in funding.
But, 100U does not see any impact of the funding winter. It claims to have been continuing to invest at the same pace as before.
“I am going to a conference in the US next month in order to attract $1 trillion of capital for Indian startups,” says Sharma.
In a presentation, the VC firm said that its first fund is tracking a gross internal rate of return of 28.6 percent. It has a corpus of $100 million, of which 70 percent has been deployed across more than 145 portfolio companies.
A senior executive of 100U says that 80 percent of the capital raised in the first fund came from domestic sources — banks, family offices and high-networth individuals like CXOs of big tech firms such as Google. The rest came from foreign investors.
“One of them was an Egyptian family office as well,” he adds.
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