Making Learning Fun and Intuitive
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