In an exclusive conversation with Dr. Apoorv Ranjan Sharma, Co-Founder & MD, 9Unicorns, trends in startup funding has been discussed specially in the times of COVID-19. Edited excerpts:
Can you elaborate on your journey from an Entrepreneur to Investor?
I was pursuing my PhD in Incubation & Diploma in Mentor Studies from Berkeley Institute of Management, University of California, when I became well-acquainted with the concept of angel investing. Upon researching more, I realized that the angel investing landscape in India largely unexplored – restricted only to the metros. Soon after my return to India, I launched my first incubator between 2002 and 2004, which got me the ‘Best Incubator Award’. I then served as the Vice President of India Angel Network (IAN). While my stint lasted XX years, I left IAN to set up my first startup accelerator VentureNursery in 2012. In the following years, I mentored and funded a number of high-potential startups including OYO, Fynd and SuprDaily, among others. Four years later, I co-founded Venture Catalysts – India’s first integrated incubator. I launched 9Unicorns in 2019 with a vision of bridging the gap in early-stage funding for startups. Looking back, I can say that the journey from an entrepreneur to an investor has been nothing short of a roller-coaster ride. I came across a few challenges along the way, but it’s been a great experience overall.
How will the 9Unicorn Fund help emerging businesses?
India has the 3rd-largest startup ecosystem in the world, trailing only the US and its neighbouring nation China. However, many Indian startups die a premature death due to the funding crunch. Industry estimates suggest that around 90% of startups close down their business within the first five years of inception. With 9Unicorns, we wanted to flip this narrative by providing funding assistance to promising early-stage startups for up to 18 months. After that, the selected startups can raise large funds for Series A+ rounds from prominent growth-stage investors. Additionally, we will also offer mentorship and networking opportunities for emerging businesses.
What is the current roadmap? Please highlight your focus areas.
9Uniconrs received a dedicated fund allocation of Rs 300 crore from Venture Catalysts. We plan to fund 100+ idea-stage startups every year, offering a standard deal of Rs 60 lakh in exchange for 5% equity, and help them in building proof-of-concept following which Venture Catalysts will further invest Rs 3-5 crore during subsequent funding rounds for eligible companies. Our focus sectors include agritech, fintech, electric vehicles, mobility, augmented reality, VR, AI, retail and FMCG, among others.
How 9Unicorn is different than other funds and what value additions will it facilitate to emerging businesses?
As India’s first VC accelerator, 9Unicorns is a one-stop mentoring, networking, and growth facilitation platform for early-stage startups in the country. We will not only provide funding, but will also help startup leaders build a core team, develop a proof-of-concept and connect to VCats’ extensive network of angel investors. In a first-of-its-kind undertaking in India, we aim to replicate the success of Y Combinator in the US. 9Unicorns’ unique value proposition lies in its end-to-end approach to startup investing, enabling emerging businesses to raise funds and utilize the capital optimally.
How do you think the current scenario (COVID-19) will affect the startup industry?
While it’s too early to comment on this issue, the coronavirus pandemic will affect businesses of all sizes, but the impact will be far-reaching on the startup ecosystem. I expect a slowdown in growth, geographical expansion and operational activities. Raising funds may also become a challenge as investors will start taking a more cautious approach to their spending. Startups in sectors such as travel, aviation and logistics will take a major hit, whereas EdTech, FinTech and home entertainment and e-talier companies are likely to a growth surge.
Your views on how startups should best use their capital amid the Coronavirus Crisis?
I believe startups avoid the cash-burning strategy for the coming months. The coronavirus crisis necessities the need for preserving cash to sustain in the long-run. With a sudden fall in funding activities in the startup space, it’s important to cut down on redundant costs and focus only on the core offerings. Reassessing the businesses strategy is also a wise idea to better respond to the situation.
What kind of startups do you prefer for funding support?
I’ve observed this tendency of Indian VCs to invest only in tech-centric businesses. While I have backed highly scalable technology startups, I prefer to offer funding support to startups operating in FMCG, healthcare and agriculture – sectors that have unbridled potential but are often overlooked by the angel investor community.
How many startups do you expect to fund in the next year?
We expect to fund nearly 100 startups in the next one year.