THE MONEY ANGEL
There was a time not so long ago when there were hardly any angel investors in India. Today, they number in the thousands. One among them is Utsav Somani, who has achieved unusual prominence in a matter of years and is currently engaged in bringing the wo
There was a time not so long ago when there were hardly any angel investors in India. Today, they number in the thousands. One among them is Utsav Somani, who has achieved unusual prominence in a matter of years and is currently engaged in bringing the world’s largest start-up platform AngelList’s syndicate platform to India.
ANGEL INVESTORS, ALSO CALLED ANGEL FUNDERS, are a relatively new breed in the Indian business firmament, whose numbers have steadily gone up post the liberalisation of economy in the nineties. Angel investors fill a gap in the investment machinery by providing seed capital or funding to typically smaller companies, to whom venture capital or bank loans are not available. However, as opposed to venture capitalists, angel investors are individuals, who participate at the inception stage of start-ups, in exchange for usually an equity ownership. They may also form small groups by pooling resources and sharing information to provide management advice and investment capital to a portfolio of companies.
While the reasons for choosing to be an angel funder may vary from person to person—it could be for monetary returns, or wanting to share knowledge and expertise with newer generations of entrepreneurs or keeping abreast of developments in a particular business area of interest— for Utsav Somani, it was “accidental”. “Unfortunately or fortunately, I did not choose to be an angel funder,” says Somani. “It all started over a coffee conversation with a friend when we were discussing how the word ‘startup’ is now mainstream in India and how to be a part of it. One thing led to another, and I found myself to be part of various angel networks and sitting for pitch sessions.”
Back then, he was still involved in the family business and so the only attraction that the world of start-ups held for him was to look at it as an opportunity to invest into an asset class..
How it all started
Somani’s foray into the world of investments was preceded by brief stints with several organisations, including internships with ABN Amro and HCL Technologies and then a few months with Bank of America, as a part of the bank’s Global Wealth & Investment Management team.
In terms of academics, as his initial area of interest was programming, it led to an undergraduate degree in Information Systems Management and Finance from Singapore Management University. Later, given his broadening horizon of interests, he proceeded to ESADE Business School in Barcelona, where he acquired a master’s degree in Innovation and Entrepreneurship in 2012.
Being from a business family with interests in health care (they own a hospital in Lucknow), agro-processing (they have projects in Africa), garment manufacturing and commercial real-estate leasing, his immediate engagement post his master’s was with the family holding company, Utsav Exim Ltd, where he functioned as executive director. But fate had other plans for him.
A couple of years on, he drifted into the world of angel funding. “I chose this path due to two main reasons,” says Somani. “Firstly, I wanted to be a part of the revolution that is going to be brought about through internet and technology; and, secondly, I thought this could be a great avenue to get an entrepreneurial drive activated in me and see how I could piggy back on more talented brains to come up with something more meaningful to do later, which could create a bigger impact directly proportional to my interests.” In a way, it was also an opportunity for him to explore interesting avenues of investment, so as to expand the family’s portfolio of investments.
Up the rungs of success
As a first step to understanding his chosen field better, Somani became part of angel network companies such as Indian Angel Network (it
brought together successful entrepreneurs and CEOs with a common interest in investing in start-ups) and Mumbai Angels (it brought aspiring entrepreneurs face to face with potential investors, including businessmen, professionals and executives). But being an angel investor proved to be more difficult than he had anticipated. “I found myself sitting for pitch sessions with a crowd that was substantially older and more experienced in their fields. This is where I felt the pressure to make a mark by showing how I could add value rather than just be seen as a kid with nothing to bring to the table,” says Somani. “It took many painstaking hours of networking, chasing some of the best angels, speaking to founders to see how I could add value and spending countless hours at events hoping to get a minute of someone important. Eventually, things turned out favourably and I did manage to make some sort of dent,” he adds.
Somani’s lucky break actually came by way of an opportunity from LetsVenture—a firm backed by well-known industrialists that connects start-ups with accredited investors. It allowed him to drive outreach to investors and start-ups by being the single point of contact for everything related to early stage fund-raising and investor relations.
But LetsVenture too is a thing of the past for Somani. A successful angel funder today, he has made 14 investments in India and another 7 in the US—all on a personal level and in a brief span of three years. His portfolio of investments is impressive and includes names such as Testbook, a one-stop online test preparation facility, of which he is also the ‘Investor Director’ and board member; AdpushUp, an advertisement revenue optimisation service for web publishers; and FabBag, a subscription-based retail platform for beauty products, to mention a few.
That apart, in what perhaps is the brightest hour yet for the aspiring angel, he now heads the San Francisco- based start-up platform AngelList in India and is currently working towards setting up a base for its arrival in India. AngelList is a web-based community of start-ups, investors and job seekers that is reputed to be the world’s largest start-up platform, having raised over $500 million for 1,200-plus start-ups, apart from powering the world’s largest dedicated seed fund of $400 million. It was founded by the company CEO Naval Ravikant, who recently won the ‘Angel Investor of the Year’ award in Silicon Valley, USA. A guiding light and inspirational figure for Somani, Ravikant has personally invested in hugely successful companies such as Uber, Twitter and other similar unicorns, which boast returns in multiples of 1,000.
The going has been good for Somani so far. But what about the future? Going by his positive outlook, it would seem that things have just about started to warm up for him. The Indian ecosystem, according to him, has seen the boom and bust cycle at an accelerated pace and so the teams and ventures that have survived the phase will be ready for the next phase of fundraising and growth. “2017 will see a lot more action, as we have seen some big funds being raised in the market and waiting to be deployed,” he says optimistically. Judging by his rising fortunes and improving expertise and vision, the best may have just begun for the Young Turk.
Clockwise from top: Utsav Somani; Utsav Somani (extreme left) at the LetsIgnite technology conference with work colleagues (l-r) Arjun Seth, Karan Kumar, Bharat Mehra; Utsav Somani as part of the panel at World Startup Expo 2016
From top: Utsav Somani chilling with cousins; at the Global Citizen Festival India