Mak­ing Learn­ing Fun and In­tu­itive

The Economic Times - - Power Of Ideas -

Cap­i­tal, is set­ting up a $25-mil­lion earlystage fund called Altius Ven­tures.

The pos­si­ble hur­dles do­mes­tic fund man­agers face are a far cry from the ease with which Sil­i­con Val­ley ma­jors such as Se­quoia Cap­i­tal, Nexus Ven­ture Part­ners and Ac­cel Part­ners were able to raise new in­vest­ment ve­hi­cles last year. In Fe­bru­ary, Se­quoia Cap­i­tal In­dia com­pleted rais­ing money for a $920-mil­lion fund, the big­gest by any VC fund for In­dia-spe­cific in­vest­ments.

“LPs glob­ally have seen a cor­rec­tion in their at­ti­tudes to­wards In­dia. There was a cer­tain ex­cite­ment that per­sisted for a num­ber of years but that, un­for­tu­nately, led to a lot of medi­ocre fund man­agers man­ag­ing to launch funds,” said Harsh Pais, part­ner at law firm Tri­le­gal.

Oth­ers, more op­ti­mistic, point to the tremen­dous in­flow of pri­vate cap­i­tal into the coun­try’s startup ecosys­tem in 2014 and 2015 as ev­i­dence that In­dia con­tin­ues to be among the fore­most des­ti­na­tions for global LPs. In 2015, in­vestors poured $19.7 bil­lion into do­mes­tic star­tups, ac­cord­ing to data col­lated by VCCEdge, cross­ing the pre­vi­ous bench­mark of $18 bil­lion set in 2007. In 2014, in­vest­ments to­taled $12.4 bil­lion. “With GDP growth at over 7%, and hav­ing re­cently over­taken China as the world’s fastest-grow­ing ma­jor econ­omy, In­dia is a key part of the asset-al­lo­ca­tion de­ci­sion (for LPs),” said Deepak Shah­dad­puri, man­ag­ing di­rec­tor of DSG Con­sumer Part­ners.

The in­vest­ment firm re­cently on­boarded Ver­lin­vest, the Bel­gium-based in­vest­ment hold­ing com­pany cre­ated by the found­ing fam­i­lies of An­heuser-Busch InBev, as an LP in its sec­ond fund, DSGCP II. “It took us 10 weeks to get to our first close and most of the in­vestors we met in Asia, Europe and the United States were re­cep­tive to an In­dia prod­uct,” Shah­dad­puri said.

In­dus­try pro­fes­sion­als say that the en­try of strate­gic in­vestors into In­dia, such as Ja­pan’s SoftBank and China’s Alibaba Group and Fox­conn, who have shelled out sig­nif­i­cant sums over the past 18 months, has forced ven­ture cap­i­tal and pri­vate equity firms to be a lot more dis­cern­ing in their in­vest­ment ap­proach. “They have be­gun to fo­cus on new themes that are based on mul­ti­ple fac­tors, in­clud­ing the uptick in the econ­omy,” said Tri­le­gal’s Pais. For some LPs, there is sim­ply no ques­tion of wa­ter­ing down their fo­cus on In­dia.

“For us, clearly, In­dia is our largest mar­ket in the re­gion and we are ac­tively look­ing for op­por­tu­ni­ties in the coun­try,” said Ni­cholas Ca­tor, ex­ec­u­tive di­rec­tor at Ver­lin­vest. “That is why we have part­nered with Deepak in his lat­est fund, be­cause we feel that over the next 3-4 years it will bring us op­por­tu­ni­ties to back high-growth con­sumer­com­pa­nies.”

A slow­down in cap­i­tal al­lo­ca­tion by LPs could not come at a worse time for fund man­agers, who have am­bi­tious plans

MD, DSG Con­sumer Part­ners Amin, co­founder at Smartiv­ity Labs. Over the next few months, the team thought about the prob­lem and quit their jobs and got down to mak­ing prod­ucts. “Like Steve Jobs said con­nect­ing the dots, we had colour­ing ac­tiv­i­ties and we had aug­mented re­al­ity. Now we can make Aug­mented Re­al­ity en­abled colour­ing ac­tiv­i­ties,” said Amin. They called their learn­ing kits as ‘Yoohoo box’. The Delhi-based startup right now h a s t wo br o a d pr o duc t r a n g e s : S T E ( A) M (Sci­ence, Tech­nol­ogy, Engi­neer­ing, Arts a nd Mat hematic s) le a r ni n g based Do-It-Your­self kits, which have a fun­da­men­tal sci­enti fic con­cept at the core of each ac­tiv­ity, and Smartiv­ity EDGE, their aug­mented re­al­ity-en­abled lean­ing ac­tiv­i­ties. Aug­mented re­al­ity is a tech­nique which en­ables su­per­im­pos­ing dig­i­tal ob­jects over phys­i­cal ones. T he t e a m wa s

i n s pi r e d b y Amer­i­can psy­chol­o­gist and psy­cho­me­tri­cian Robert Stern­berg’s the­ory of suc­cess­ful in­tel­li­gence, which pro­poses that a per­fect bal­ance of cre­ative, prac­ti­cal and an­a­lyt­i­cal in­tel­li­gences is nec­es­sary for suc­cess in real life. The user has to down­load the Smartiv­ity EDGE ap­pli­ca­tion, which is avail­able on both an­droid and iOS to ex­pe­ri­ence the aug­mented re­al­ity plat­form.

“For ex­am­ple, a child colours a lion with pink and scans the sheet. The pink lion will come alive on screen and you get to know ev­ery­thing about the an­i­mal. You also have spell­ing tests along with it. The lion will nod if you an­swer cor­rectly, ” said Amin. The startup’s app is avail­able in 52 cities across the coun­try and has tied up with brands such as Ham­ley’s and Land­mark as also with in­de­pen­dent lo­cal toy stores. The prod­uct prices range from ₹ 249 to ₹ 999. The fu­ture plans for the startup in­clude ro­bot­ics based learn­ing tool, which aims to teach chil­dren the fun­da­men­tals of pro­gram­ming, and an in­ter­net con­nected en­gage­ment that con­nects toys, one could call it an in­ter­netof- toys.

“S ma r t i v i t y Do - I t -You r s e l f STEM based ac­tiv­i­ties en­cour­age learn­ing of core con­cepts while hav­ing fun, whereas the Aug­mented Re­al­ity en­abled col­or­ing sheets and puzzles en­hance chil­dren’s learn­ing and en­gage­ment. Given the high level of in­no­va­tion at the com­pany, the in­vest­ment was a nat­u­ral choice for us,” said Gau­rav Jhun­jh­nuwala, di­rec­tor at S Chand.

GOPAL JAIN, Man­ag­ing Part­ner at Gaja Cap­i­tal

Pri­vate equity and ven­ture cap­i­tal in­vestors in­vested $19.7 bil­lion till mid-De­cem­ber 2015, smash­ing an eight- year-old record of $18 bil­lion set in 2007. 2014 also saw in­vest­ment trans­ac­tions to­talling $12.4 bil­lion

On an av­er­age, 2015 saw three new star­tups be­ing cre­ated ev­ery day. Ac­cord­ing to IT Ser­vices in­dus­try lob­by­ing body Nass­com the num­ber of earlystage com­pa­nies in In­dia rose to 4,200, sharply up from 3,100 in 2014

A num­ber of well­known in­vest­ment pro­fes­sion­als from lead­ing in­vest­ment firms such as He­lion Ven­ture Ad­vi­sors and SAIF Part­ners, quit the firms to launch their own funds

From left: Smartiv­ity Labs founders Ash­wini Singh, Ra­jat Jain, Tushar A Amin and Apoorv Gupta Right & be­low: Chil­dren with their par­ents ‘con­nect’ over the Smartiv­ity kits

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