EVC Ventures, a $50-million venture capital fund focused on early-stage startups in adtech, e-commerce, gaming, education and Internet of Things (IoT), has exited on-demand grocery startup Milkbasket, managing partner Anjli Jain told this portal.
“The absence of IPOs in the Indian market leaves mergers and acquisitions (M&As) as the only achievable exit course for VCs. Even then, experts say that things are not very reassuring,” she said in an interaction with DEALSTREETASIA.
US-based early stage VC firm had set up EVC Ventures to focus on US and Indian markets. The fund, which also operates accelerators in US and India, and counts I-Made, OculusIT, BigDeal, and BlackBeltHelp in its portfolio.
In an interview, Anjli talks about the company’s plans, the crowded e-commerce market in India and the current investment climate in India.
How has 2017 for EVC Ventures been so far?
2017 has been a great year for us. We just got an exit of 200 per cent from one of our portfolio companies, MilkBasket. It had previously raised half a million dollars in which we led the round with participation from Zhu Dao Investments and Yeahmobi CEO Peter Zou, along with Vikas Banga and Manav Kamboj of Indian e-commerce platform Snapdeal.
This comes in when most e-commerce establishments in India are yet to show profits. Many don’t even have a trail to productivity, which often discounts a public market listing as an exit course for investors. The absence of IPOs in the Indian market leaves mergers and acquisitions (M&As) as the only achievable exit course for VCs. Even then, experts say that things are not very reassuring.
How much capital has been deployed from your $50 million fund? Are there any plans of raising a second fund any time soon?
We have deployed approximately 30 per cent of our fund. We will raise a new fund once this fund is exhausted.
What are your focus areas?
EVC Ventures is a $50 million fund focused exclusively on early-stage investments in ed-tech, mobile, platform-as-a-service, big data, analytics, AI, and IoT, etc. Generally, our process is centred around conceiving ideas, identifying motivated, high-energy talent, building a leadership team and investing in their success – taking them from zero to a company with a problem to solve, product, pricing, revenue, clients and breakeven. It’s not about how many startups we want to invest in, it’s about how many ideas we want to launch and the people we want to invest in to take the idea to the next level.
Is there any sector you have not invested in yet and are looking to bet on?
There are many sectors that we haven’t invested in. If there’s an idea that supplements our thesis, be it cryptocurrency or augmented reality, we would be happy to explore it.
What is your view on e-commerce business in India?
The e-commerce business in India is highly cluttered. We recently exited from a micro-delivery e-commerce startup, so we understand that without innovation, e-commerce is a lost cause for aspiring and experienced entrepreneurs & Investors.
How do you decide to invest in a particular startup?
They should fall in line with our expertise and thesis and we want to see a beautiful product and market penetration.
What is your ticket size?
Our initial investment range varies from $150,000 to a few millions.
What are your preferred exit avenues?
We educate our startups to focus on getting clients, generating a revenue, hitting breakeven and then hitting profitability. It’s a crawl-walk-run approach to building a business. We recently exited from Milkbasket and got a 200 per cent return from this transaction. After all, innovation lies at the base of a venture and we invest in foundations necessary for tomorrow.
Besides India and US, any other geography you looking to invest into?
Our thesis focuses on investing in startups that are out of India targeting the North American market.
How do you see the current investment climate in the country?
Despite the challenges, the opportunities are immense for foreign companies operating in India, although many highlight that success requires a long-term planning horizon and a state-by-state strategy to adapt to the complexity and diversity of India’s markets.
India’s infrastructure needs are estimated at $1.5-2 trillion over the next 5-7 years, offering excellent opportunities for US companies to participate in the country’s development, provided appropriate mechanisms for financing are developed.