Digital tech-focused Arkam Ventures, which has invested in companies such as business-to-business marketplace Jumbotail, investment start-up Jar, and lending platform Kreditbee, is betting on India’s ongoing digital transformation, says its Managing Director, Rahul Chandra.
Edited excerpts from an interview
What is Arkam Ventures’ core investment strategy?
The one overarching investment strategy we follow is how digitisation impacts a sector where a customer who was not being served earlier can now access a non-discretionary part of their consumption. We have backed entrepreneurs who are solving problems for that half-a-billion population in the country that lives beyond the metros.
What is your average investment per company?
We are currently deploying from the first fund, which is $106 million. Our average ticket size is ₹20 crore for the first cheque and we reserve another ₹30 crore for the follow-up in those companies. Our portfolio comprises 18 companies from the first fund.
We look at about 1,200 ventures a year, conducting 60-80 deep dives, and invest in six or seven of them. We look at early stage to Series A and Series B investments across sectors — fintech, skilling, agritech, mobility, SaaS [software-as-a-service], and manufacturing — and we are also evaluating areas like EV [electric vehicles] and AI [artificial intelligence].
We will soon deploy from our second venture capital fund of $180 million, eyeing early-stage bets in around 20 companies.
What is your preferred exit route?
The market has grown and we see our portfolio solving needs of customers and the middle-area segment. There is wide digital adoption in India and it lends itself to the India growth story. For most of our portfolio companies, we foresee exit through IPOs [initial public offering] in the Indian markets.
How would you describe your journey so far?
The things we have learnt along the journey include not being ahead of the founders’ thinking in terms of the current potential, by filling the gaps with our imagination as investors rather than the ambitious energy of a founder. I’m now working with this concept of a key founder among multiple co-founders. I am looking to identify the primary source of energy in the team — who’s going to drive the company forward.