Venture Catalysts invests in six to eight startups a month, focusing on high-potential sectors. As the fund house continues to expand its portfolio, co-founder and managing director Apoorva Ranjan Sharma outlines how the firm intends to identify unique solutions and first-mover advantages in a rapidly evolving market. Edited excerpts from the interview:
How many funds have you deployed till now?
Venture Catalysts has four funds, and three angel funds, which execute six to eight investments a month. The platform is an angel fund structure. Secondly, we have 9Unicorns, now rebranded as 100Unicorns. Seventy five per cent of the first fund has been deployed. Beams Fintech Fund has deployed 20-25 per cent capital. Elev8 is a $150-million fund. Collectively, they account for $550 million. Spyre, a prop-tech fund, is a $500-million close-ended fund.
Which are the sectors in focus?
The current focus is on space tech, semiconductor startups, manufacturing automation, and healthcare product startups. As an early-stage investor, we consider what may be hot in the next two or three years. For example, we started investing in electric vehicles in 2019-20 — Blu Smart Mobility, Charge Zone, and Zypp (Mobycy).
We have select investments in defence, and some of them have patents.
One of our companies, Ykrita Life Sciences, is developing a bio-engineered artificial ectopic liver to treat patients with liver failure, in lieu of an organ transplant.
How do you pick companies to invest in?
We are sector-agnostic. We look for companies that solve unique problems and have first-mover advantage. Our fund thesis is to identify founders in the idea stage, and growing sectors in the advance stage. Research goes into identifying hot sectors and business models that can work in India. We also see the exit available for those sectors.
Why do you prefer early-stage startups? What is the average cheque size?
Spyre invests in growth-stage startups, while Venture Catalysts and 9Unicorns concentrate on seed stage and series stage, respectively. The growth stage is not our forte. Cheque size in Venture Catalysts varies from $250,000 to $1 million. At 9Unicorns, it is $250,000-500,000. In the growth funds, it is $10-25 million.
What is your exit strategy?
We have created companies like Pixus (formerly Absentia). We gave them the first three cheques. It is now a billion-dollar-plus company. We gave the first three cheques to Video Verse (formerly Torch). We got exit offers from these companies.
We have invested in a company called Rezolve.ai, based out of Dehradun; we get a lot of startups like this from tier-two cities. Their main base is in the US. Many deep-tech AI product companies constantly give exit offers.
Around 15 per cent of our investment is in AI and deep-tech. Recently we sold a company called Prescinto to IBM. We invested the first cheque from Venture Catalysts and 9Unicorns.