Specialist funds for hottest startups in India

With the Indian startup industry booming like never before, more and more Indians are coming forward and investing in it to rake in the benefits.  These industry biggies with an understanding of local business and rupee capital are investing their money into specialist funds which are used in identifying the hottest ventures in the town such as software products, consumer Internet and mobile technology.

The Manipal group scion Ranjan Pai and the Patni brothers Arihant and Amit, are among the forerunners in backing these small to midsize funds. Other active participants include Bharti enterprises vice chairman Akhil Gupta, Marico chairman Harsh Mariwala and Raheja group’s scion Sandeep Raheja.

According to Bharti enterprises vice chairman, Akhil Gupta, if the industry wants to see a lot of entrepreneurs emerging then investing money in venture capitals is the best way forward. Gupta has recently invested in early stage fund YourNestAngel fund and is looking forward to investing in more such funds.

About half a dozen companies have seen their valuations increase to over $1 billion since the last year. For example, Flipkart’s valuation increased to $7 billion when it raised money in July 2014.

Others who enjoy the membership of the million dollar club include Just Dial, Snapdeal and Mu Sigma.

The country’s super rich individuals who have an investible surplus over 25 crore are trying hard to be a part of the next wave of enterprise by upping their stakes.

Harsh Mariwala of Marico realized the need of diversifying some two year ago. His company has backed startup accelerator Ant Farm and Blume Ventures which is an early stage investment.

A survey conducted by consultancy firm McKinsey reveals that, at present the allocation of money towards alternative asset classes in India is just 2 percent, while the global average stands around a strong 15-20 percent. With more funds approaching the market, the trend is showing an upward trajectory.

According to George Mitra, who is the chief executive officer of Avendus Wealth Management, HINs are dulled about real estate because hardly anyone was successful in making money. So, the capital is now moving towards alternative assets like venture capital funds.

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