Funds managed
Fund name | Asset Class | License |
India Quotient | VC/ Seed | SEBI AIF Cat 1 |
About the AMC
- Anand Lunia (Founding Partner), Madhukar Sinha (Founding Partner) and Prerna Bhutani (Partner).
- Launched in June 2012, the fund with a corpus of Rs 30 crore has many interesting startups in its kitty already, such as iimjobs, Red Quanta, Belita, Engrave, Dogspot, Mapmytalent, Vellvette, and The App Kiosk.
- Specializes in Angel Funding, Early stage Investing, Seed Funding, Incubating
https://www.linkedin.com/company/india-quotient
Investment Philosophy (for firm)
https://www.startuplanes.com/interview-of-mohit-mittal-investment-professional-at-india-quotient/
Invest seeing a positive side that will get back the good returns once the company grows big. The company should be scalable, have a big market, solving the pain point, sector agnostic, no linear business, strong believers of profitability.
Media
Title: India Quotient’s new fund marks first close at $30 million, Source: Economic Times, Date: 20 June 2019
Early-stage venture capital investor India Quotient, early backer of companies like online lending platform Lendingkart and vernacular messaging platform Share-Chat, has made a first close at over $30 million for its new fund targeting $50-60 million. The venture firm has roped in Gulf-based billionaire of Indian origin Dr BR Shetty as a major backer with a $10 million commitment, with remaining capital coming from other HNIs and institutions like Government of India’s fund of funds managed by SIDBI.
India Quotient has till now raised $23 million across two funds, backing a total of 40 companies which are expected to hit a combined valuation of $1 billion, according to a statement. Overall the portfolio companies have raised $200 million in capital. The new fund is a significant step up for India Quotient in terms of the corpus. It’s first fund of $5 million was closed in 2012 while the second fund, which raised $18 million, closed in 2015 . The firm does not plan to change the strategy of backing seed stage companies, but the corpus gives it an ability to put more capital in each of them.
“A lot of our companies go out and raise money very soon, but we want to do less of that. We will put the first $1 million in the company ourselves and fund it for two years as most early-stage companies right now are getting funded for only 12 months,” said Anand Lunia, founding partner at India Quotient. According to Lunia, what differentiates the firm does its small team primarily comprise four partners, which is an exception given the size of the fund. Other partners at the firm include Other partners at the firm include Madhukar Sinha, a former executive at Aavishkaar who has been with India Quotient since its early days, besides Prerna Bhutani and Gagan Goyal, both former entrepreneurs.
Some of India Quotient’s bets in areas like social, which include Sharechat and video sharing application Clip, and in financial technology like Lendingkart and Loantap have already attracted follow-on rounds of funding. Other notable companies in its portfolio include cosmetics brand Other partners at the firm include Madhukar Sinha, a former executive at Aavishkaar who has been with India Quotient since its early days, besides Prerna Bhutani and Gagan Goyal, both former entrepreneurs.
Some of India Quotient’s bets in areas like social, which include Sharechat and video sharing application Clip, and in financial technology like Lendingkart and Loantap have already attracted follow-on rounds of funding. Other notable companies in its portfolio include cosmetics brand Sugar, job portal IIMJobs and fashion portal FabAlley.
India Quotient will continue to focus on areas like financial technology, social and digital media, consumer brands and deep technology segments such as internet of things.The fund expects to reach a final close in the next six months. Existing investors who have backed the fund include Flipkart cofounder Binny Bansal, Singapore-based family office RB Investments and venture debt firm Anicut Capital founder Ashvin Chadha. “The massive challenges that India and developing world face in healthcare, finance, education can only be met by innovation. I believe the future in these sectors will be defined by entrepreneurs who use technology to offer solutions to the masses,” said Shetty, founder of UAE Exchange and London-FTSE-listed NMC Hospitals, on his investment in India Quotient.
Title: India Quotient to raise ₹300 crore add-on fund to invest in portfolio winners, Source: live mint, Date: 08 August 2019
Venture capital firm India Quotient, an early backer of startups, including social network Share Chat and digital lender Lending kart, is raising a ₹300 crore add-on fund to invest in its best-performing portfolio companies.
“An opportunity fund becomes a micro-cap portfolio containing high growth companies validated with strong investors. So now, we have reduced mortality, reduced duration and yet retain venture (level) returns,” said Anand Lunia, founding partner, India Quotient said in an interview. Lunia is best known as an angel investor in Rebel Foods (formerly Faasos), where he still holds a stake.
India Quotient plans to close the fundraising for the add-on fund along with the final close of its $60 million third venture capital fund by September. The venture investor has appointed Kotak Wealth Management to market the fund.
The add-on fund is targeting a base size of ₹150 crore, along with a greenshoe option to raise another ₹150 crore. A greenshoe option gives the fund an option to raise more than it had originally planned, if it receives higher subscription interest.
India Quotient will use the add-on fund to invest in companies such as ShareChat, Lendingkart, LoanTap and Sugar Cosmetics, among others. The venture capital (VC) firm started with its first fund of $5 million in 2012, followed by an $18 million fund in 2015. The third fund and the new add-on fund will take its assets under management to $125 million. Out of its 70 portfolio companies, the new fund will invest in 15-20, over the next three years. “For us as a fund, the biggest gain is that we can support our top performing companies for longer. It also helps us connect with domestic investors (limited partners),” Lunia said. The fundraise comes at a time when a number of early-stage VCs, including Blume Ventures, Kae Capital and DSG Consumer Partners, have been raising add-on funds, aimed at investing in fast-growing portfolio companies.
While Kae Capital raised a ₹100 crore add-on fund in January this year, DSG Consumer Partners, which invests only in consumer-focused startups, raised two add-on funds of $10 million and $20 million in 2014 and 2016, respectively.
India Quotient plans to co-invest in startups with a valuation of $20-100 million, along with marquee funds such as Sequoia, Accel and Tiger Global, and will not invest more than 25% of the round size.
Title: Exclusive: India Quotient Invests In Vernacular Hyperlocal Video News Startup Lokal, Source: inc42, Date: 07 August 18
The investment from India Quotient will help Lokal strengthen its team and expand in key geographical areas.
Founded by Jani Pasha and Vipul Chaudhary in June 2018, Lokal aims to serve news to vernacular audiences based on their location, with separate language offerings for different districts across states. At present, it is present in only one district in Telangana.
The company is building a local news platform across India in native languages. Lokal uses qualified freelancers and on-ground journalists, who submit news on its platform. This enables it to deliver local news quicker than any other news platform.
Talking to Inc42 about the investors, Jani Pasha said, “Our investors have experience investing in leading vernacular platforms. They understand the user, which is a huge plus as they have seen Sharechat and Clip grow from scratch. Their advice will be of great value in building Lokal.”
Pasha shared that the company has raised enough funds to sustain for 12-15 months.Earlier, in conversation with Inc42, at the time of the first close of its third fund, Prerna Bhutani, co-founder of India Quotient, had said that the team would continue to invest in networks such as social network ShareChat and digital media video startup Clip.
Title: India Quotient makes the first close of its new fund at $30M, Source: Economic Times, Date: 03 April 2018
Early-stage venture capital investor India Quotient, an early backer of companies like online lending platform Lending kart and vernacular messaging platform Share Chat, has made a first close at over $30 million for its new fund targeting $50-60 million. The venture firm has roped in Gulf-based billionaire of Indian origin Dr. BR Shetty as a major backer with a $10 million commitment, with remaining capital coming from other HNIs and institutions like Government of India’s fund of funds managed by SIDBI.
India Quotient has till now raised $23 million across two funds, backing a total of 40 companies which are expected to hit a combined valuation of $1 billion, according to a statement. Overall the portfolio companies have raised $200 million in capital. The new fund is a significant step up for India Quotient in terms of the corpus. It’s first fund of $5 million was closed in 2012 while the second fund, which raised $18 million, closed in 2015. The firm does not plan to change the strategy of backing seed stage companies, but the corpus gives it an ability to put more capital in each of them.
“A lot of our companies go out and raise money very soon, but we want to do less of that. We will put the first $1 million in the company ourselves and fund it for two years as most early-stage companies right now are getting funded for only 12 months,” said Anand Lunia, founding partner at India Quotient. According to Lunia, what differentiates the firm is it’s small team primarily comprising four partners, which is an exception given the size of the fund. Other partners at the firm include Madhukar Sinha, a former executive at Aavishkaar who has been with India Quotient since its early days, besides Prerna Bhutani and Gagan Goyal, both former entrepreneurs.
Some of India Quotient’s bets in areas like social, which include Sharechat and video sharing application Clip, and in financial technology like Lendingkart and Loantap have already attracted follow-on rounds of funding. Other notable companies in its portfolio include cosmetics brand Sugar, job portal IIMJobs and fashion portal FabAlley. India Quotient will continue to focus on areas like financial technology, social and digital media, consumer brands and deep technology segments such as internet of things.
The fund expects to reach a final close in the next six months. Existing investors who have backed the fund include Flipkart co-founder Binny Bansal, Singapore-based family office RB Capital and venture debt firm Anicut Capital founder Ashvin Chadha. “The massive challenges that India and developing world face in healthcare, finance, education can only be met by innovation. I believe the future in these sectors will be defined by entrepreneurs who use technology to offer solutions to the masses,” said Shetty, founder of UAE Exchange and London-FTSE-listed NMC Hospitals, on his investment in India Quotient.
Title: India Quotient: The contrarian investors, Source: Forbes India, Date: 19 April 2017
https://www.forbesindia.com/article/startups/india-quotient-the-contrarian-investors/46721/1
“It’s fair for entrepreneurs to follow the money, right?” Anand Lunia asks, leaning back on his swivel chair, hands behind his head. It’s a sunny March morning and we’re seated in the conference room of his Mumbai office. “It’s very fair,” he answers his own question, without pausing. “It’s also very fair for the media to follow the money. But, at the same time, there is far more money in not following the money,” he says, leaning forward to stress on the “not”. “To be contrarian, that is what we’re trying to do.”
As founding partner of India Quotient, an early-stage fund established in 2012, the lanky, bespectacled Lunia has created a niche out of being different. To begin with, the 43-year-old points out that India Quotient has the smallest cheques to offer and so has to choose its investments well. It’s not a “spray and pray” approach, he says.
Yet, often, entrepreneurs prefer to go with them. ShareChat’s Farid Ahsan is one of them. When his co-founders and he were ready to raise seed funding in early 2015 for their vernacular language-focussed social networking app, they had two offers: One from India Quotient and another from SAIF Partners. The former offered them Rs 50 lakh whereas SAIF, a leading venture capital firm, was willing to pump in about Rs 3.25 crore. “We went with India Quotient,” smiles Ahsan. The “emotional connect” clinched the deal, he says.
Lunia allowed ShareChat’s three-person team to camp in India Quotient’s office (at that time Lunia’s team worked out of Paytm’s office in the western suburb of Santa Cruz, before moving to their current office in the startup hub of Powai) for six months, rent-free, until they got their product right. When the IIT-Kanpur students were left with no money to buy food, Lunia and his team would bring extra lunch from home for them. “They told us that they won’t fund us till we are fundable. ‘Focus on the product, first’,” Ahsan recalls Lunia telling them. Today, SAIF Partners is a co-investor in ShareChat, having led the Bengaluru-based company’s $1.25 million Series A round in July 2016. India Quotient further invested in that round. “Anand and Madhukar [Sinha, founding partner, India Quotient] bring a lot of operating experience to the table, having been a part of startups themselves,” says Mayank Khanduja, principal at SAIF Partners.
Prior to launching India Quotient, Lunia co-founded edu-tech startup Brainvisa, which he sold in 2005. He was also a partner at Seedfund, another early-stage fund. “Anand’s entrepreneurial background attracted us to his fund,” says UTV group founder Ronnie Screwvala, who invested Rs 5 crore in India Quotient’s first fund that had a Rs 30 crore corpus. “We, in fact, do not invest in a fund. This was our first.”
But what is it that makes India Quotient contrarian? Not the size of its cheques for sure, for that’s no different from other early-stage funds. Neither is its focus on consumer internet companies, instead of B2B enterprises (its website explains: “Because we suck at investing in them”). What sets India Quotient apart is its focus on “India-unique stories”, as Sinha, 40, puts it. What he means is that the fund looks to invest in companies that are solving India-specific problems, like ShareChat does by giving regional and vernacular language speakers the ability to exchange messages, images and videos in their mother tongue. The proposition is simple: While the initial adopters of the internet in India understand English and have been using the web for a while, the next 100 million lack that understanding, says Sinha. That’s the audience India Quotient is targeting.
Lendingkart is another company in its portfolio that is addressing an India-specific concern. Founded by Lunia’s younger brother Harshvardhan, the online platform offers business loans in the range of Rs 50,000 to Rs 10 lakh to entrepreneurs and small businesses without collateral. The company received seed funding of about Rs 4 crore from India Quotient and others in January 2015, and now counts larger players like Bertelsmann India Investments and Darrin Capital Management as investors. “Eighty percent of India’s population is unbanked. Their creditworthiness cannot be determined in conventional ways. We serve this segment,” says Harshvardhan.
“We prefer companies that don’t need too much of manpower and capital. They both become a drag and you can’t scale quickly,” says Lunia. Instead, the fund prefers companies that have “high network effects” or those that leverage the power of the internet and smartphone penetration to achieve scale.
Online networking platform Curofy, that claims to bring together 190,000 doctors across 1,500 cities to discuss difficult cases, the latest medical developments as well as search for jobs, is a case in point. Job portal for mid-to-senior level management employees iimjobs.com is another.
India Quotient was among the first institutional investors in iimjobs.com, when it led the startup’s Rs 13 crore Series A round in November 2016, with money from its second fund. Launched in January 2015, India Quotient’s second fund has a Rs 100-crore corpus. So far, it has deployed 60 percent of those funds, marking 20 percent aside as “dry powder”. “After the first fund, we didn’t have any capital to protect our ownership in the portfolio companies,” explains Sinha. While India Quotient’s ticket size has gone up from about Rs 1 crore in the first fund to about Rs 2 crore in the second, the team is now able to reinvest up to Rs 6-7 crore in investee companies that need additional capital, keeping its ownership intact.
Lunia and team also offer the heft of their previous entrepreneurial experience. Founders of their investee companies swear by it: Saurabh Saxena of Holachef, a food delivery service that raised Rs 2 crore in seed funding from India Quotient in February 2015, believes that because the partners at India Quotient “have been there and done that”, their advice is extremely grounded and practical. About five months ago, on India Quotient’s advice, Holachef bucked the free-delivery trend prevalent among food-tech companies and instead decided to charge a fee. “India Quotient made us realise that while it will impact us negatively in the short term, it is important, eventually, at a unit economics level,” Saxena tells Forbes India.
This aside, India Quotient prides itself on bucking “hot sectors” like cab aggregation or online grocery services. “At Seedfund, we never did momentum investing. Not doing so is contrarian. Anand continues to do that,” says Pravin Gandhi, managing partner at Seedfund.
Take the case of on-demand home services, which was abuzz with investor attention in the recent past. India Quotient invested in Belita, an on-demand beauty services provider which Enrich eventually bought, back in 2011 when it wasn’t “the flavour of the month”, says Prerna Bhutani, a partner at India Quotient, who was also an entrepreneur in a previous avatar. In fact, it [the investment] was way ahead of its time. Today, the only segment that is working for large home services players like UrbanClap is beauty, which constitutes 50-60 percent of their business.
So how well has this contrarian approach worked for India Quotient? “They have been able to raise money for their first, second and now third fund, so they’ve done well,” says Gandhi, referring to another Rs 350-400 crore fund that India Quotient is in the process of floating.
While a handful of companies in their kitty have shut shop, India Quotient has successfully exited four investments with another 26 still active. Many of these have received follow-on funding from larger venture capital funds. Broadly, India Quotient’s internal rate of return (IRR) is in the range of 30-35 percent, says Sinha. With a target IRR of 50 percent for the fund, Lunia and his team are hoping that fortune will favour the contrarians.
Title: India’s Venture Capital Quotient: In conversation with Anand Lunia, Founding Partner, India Quotient, Source: Youtube, Date: 13 January 2020
Barbell investment strategy is putting money into tried and tested businesses where they are sure about returns and use other half for risky investments.
Title: Episode 4: What is IndiaQuotient betting on? | Anand Lunia and Ganesh Nayak, Source: Youtube, Date: 17 November 2018
In this episode, Anand shares that at IndiaQuotient, they are never looking for real businesses. They are actually looking for businesses that can bring a real change – whether in a habit, lifestyle, or choices. With that approach, they look for a larger audience. As Anand says, give them 20 years and all 6 of the top apps will be by IndiaQuotient’s bhailog.
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