Dexter Venture, which connects early-stage ventures who are looking to raise funds and investors, is particularly focused on startups that are disrupting traditional markets with technology. The company also invests through its sister site Dexter Angel Circle. Besides these two, Dexter also has a boutique investment banking firm called Dexter Capital Advisors. In an interview with DEALSTREETASIA, Devendra Agarwal, founder & CEO, Dexter Capital Advisors, talks about his ventures, interests and future plans.
Besides being an advisory firm, please give us brief about your other two sister companies.
Dexter Venture is a recently launched platform aimed at connecting early stage ventures which are looking to raise funds and investors who are looking to invest in high quality ventures in India. Dexter Angel Circle is basically a platform where we allow investors of our closely held network to invest in opportunities liked & vetted by the internal Investment Committee (IC).
What is the investment strategy of Dexter Angel Circle (DAC)?
DAC would usually back consumer focused ventures where technology acts as an enabler with a strong team, positive unit economics, traction and a product whose utility is beyond any question. We would prefer teams where founders have either strong domain knowledge or passion towards the venture. Our investment size ranges from Rs 20 lakh-2 crore. We would strongly prefer investing through co-investment approach and would be happy to help founders access our network of investors.
Do you think that India is witnessing a slowdown in Series A funding?
I would prefer to call it temporary lull after extra-ordinarily exuberance shown by venture capitalists in funding the ventures in last couple of years. Most of the tier 1 VC funds have raised fresh funds and a number of new funds have entered the market. We believe quality start-ups will continue to secure follow-on investments and but evaluation will be significantly more rigorous and time taken to secure funding will increase considerably.
How do you decide on lead investor in a funding round? How many angels are there on your platform?
We don’t decide on lead Investor but the companies or entrepreneur in which we want to invest. We are comfortable with lead investors which are VC Funds or top angels, for example investment in Rubique.com (erstwhile bestdealfinance.com) was led by Kalaari Capital whilst in case of Lifcare, it was led by Rajul Garg a prominent angel investor. We have around 30 angels on board.
How do you see this year panning out?
I see 2016 as a milestone year in which a number of positive things for long-term sustainability perspective are expected to happen. Most important of them, founders would not look to get easy money but would sit back and build ventures. Sanity would return in talent market. The never ending race of luring customers through discounts would stop and instead ventures would focus to bring customers via delivering tangible value. Consolidation would also allow sanity to return in sectors which have been burning money. Good quality ventures would continue to attract funding. The only negative thing I see is a number of professionals who became angel Investors in last 4 years will find it difficult to exit.
Any sector favourites?
We like to invest in what we understand thus anything consumer would be our preferred focus. Whilst AI, VR etc are hot favourites for VCs & angel investors alike we would only invest once we understand. We would also strong preference for companies which generate revenues and can become operate break-even such that venture capital is required to fund their growth and not to figure out way forward.
There are many others angel investment platforms. How do you compete with them?
We strongly believe in spirit of collaboration and co-investment. Everyone is a part of the ecosystem working towards a common goal of backing good teams, sensible business models and deliver decent returns to investor Pool.
What do you think about startup ecosystem in India? Will we see bigger deal sizes this year?
There has been a wrong notion to associate health of start-up eco system with size of funding. We see the year 2016 as a fantastic year for resilient entrepreneurs to build their ventures as talent will be available at reasonable price, overall capital pool & the number of decision makers has also increased ensuring capital is available to a quality venture with right business model. However, era of mega funding round and inflated valuations would stop.