India: Arkam Ventures gets $43.3m commitment to invest in tech startups

Photo: Reuters

Homegrown venture fund Arkam Ventures, previously known as Unitary Helion, said it has received commitments of ₹325 crore for its fund of ₹700 crore to invest in early-stage technology startups.

The new fund’s investors include Small Industries Development Bank of India, Capria, an American investment firm, and entrepreneurs including Flipkart co-founder Binny Bansal and Paytm founder Vijay Shekhar Sharma. The rest of the fund, about ₹375 crore, is expected to close by the end of this financial year.

Arkam Ventures was started as Unitary Helion in 2017 by Rahul Chandra, a former managing director at Helion Venture Partners, and Bala Srinivasa, a former partner at Kalaari Partners. It has changed its name to Arkam Ventures to avoid any confusion with Helion Venture Partners, now defunct.

From its first fund, Arkam Ventures expects to back 15 to 18 companies at the Series A and Series B stages. Its initial investment sizes will be in the range of ₹15-30 crore. The fund has already invested in lending startup Krazybee and business-to-business grocery platform Jumbotail and said it in the process of backing three more startups, which operate in financial services and agriculture technology.

The fund’s investment thesis is around finding startups that cater to the so-called middle India comprising around 400 million people whose annual family incomes range between ₹3-20 lakhs.

“(This) market is very large, but has huge inefficiencies in the form of broken supply chains, limited access to credit, and outdated brick and mortar infrastructure, all which was magnified during the covid crisis. Founders who combine a deep understanding of middle India, and leverage technology to design low cost solutions and efficient new business models can build highly differentiated and scalable businesses,” Srinivasa said.

The fund seeks startups in four areas: financial services, healthcare, food or agriculture and transportation. It estimates that these areas account for about 70% of the spending by the 400 million people, many of whom live in smaller cities and towns.

“We look at three main things. One, the product should be built primarily for middle India instead of the top 1% of the population. In the past, there have been too many instances of companies whose products cater to the top 1% and who then spend too much money to take these products to middle India. Two, the startup should be able to distribute their products efficiently to this audience. And three, the business model should have the potential of making money very soon, if not from day one,” Srinivasa said.

The fund raise by Arkam Ventures comes when most of India’s startups (and other companies) have been badly hit by the lockdowns across the country since late March. Thousands of jobs have been lost and more cuts are expected over the coming months at startups, along with down rounds and distressed sales.

Even for VCs raising capital has become tougher and some may be forced to delay raising their next funds. Deal making has plunged since March and will see a sharp from last year’s levels, VCs say. This, however, heralds a shift in power back to investors after a two-year-long funding boom during which startups were spoilt for choice of backers.

The pandemic is also accelerating digitisation in many sectors, which will create attractive opportunities for entrepreneurs and investors in these spaces.

Arkam Ventures has also put together a group of advisors including Ravi Venkatesan, former chief executive officer of Microsoft India, Reliance Jio president Vikas Choudhry and Big Basket human resources chief Hari TN. They will help the fund make investment decisions and provide advice to its portfolio companies.

This article was first published on livemint.com

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.