Global startup acclerator Kyron is planning to raise about $3 million for its maiden fund by the next quarter from limited partners to invest in startups between seed and Series A rounds.
Kyron is run by ANSR Consulting, a corporate consultancy firm that partners with multinationals to open their IT back-office operations in India. ANSR had raised $9 million in a round led by Accel Partners last year. Infosys Innovation Fund has also invested in the company.
Bangalore-based Kyron, launched in 2012 as a global accelerator, has incubated over a dozen companies. Last year, it started a new program through which it has identified the business needs of Fortune 500 companies and linked them with innovative solutions offered by startups — effectively acting as a matchmaker. The startups work with the MNC for six months.
Kyron takes a 5 per cent stake for investment up to $50,000. It networks with industry investor groups — angels, individuals and venture capital firms — to help startups raise funds when they need it, and then helps them achieve milestones that bigger VC firms are looking for.
The firm typically exits after 5-7 years. “We understand their business requirements and we manage it, including end-to-end ownership using the startup’s technology,” said Venkat Raju, Managing Director, Kyron, in a chat with DEALSTREETASIA.
“We are raising the fund to invest in such startups and validate our thesis,” Raju said. “We are in a unique position because through our due diligence of startups in our portfolio, we know how the founders think and operate. And we would come in at a sweet spot between angel funding and Series A.” Raju said that the firm is in advanced talks with investors, including existing ones.
Raju said that Kyron, by continuing to work with startups through their contract with the MNCs, would have more information about them than other investors. “If they are going to close a contract or complete a project in a certain time for a large company, we would know. These are companies who won’t get a cheque from the likes of Sequoia. We will do bridge rounds, and our risk will be mitigated because of our inside knowledge about the startups,” he said.
Raju is also an angel investor in 35 companies. He has participated in seed funding rounds in startups such as Druva, EasyTap, AmigoBulls and Wishberry, since 2012.
Some of the Kyron-backed startups that are working with MNCs are not based in the same city. “Several of them have virtual remote engagement. For instance for fintech work for large companies, most of the startups are based out of Singapore, Israel or the Bay Area,” Raju said.
Kyron plans to back more than 500 companies in the next four years across the US, China, India, Malaysia, Czech Republic and Argentina. It has partnerships with the accelerator programs of Microsoft and Google. “Startups that graduate from their programs feed into ours,” Raju said.