Artha India Ventures (AIV) is an early-stage venture capital investor. Its investment portfolio consists of hospitality and travel, fintech, data analytics, e-commerce, mobile apps, Internet of Things, Artificial Intelligence and cloud services. “Artha scouts for start-ups with disruptive ideas, strong execution and a solid team with a large addressable market,” Anirudh Damani, managing partner, Artha India Ventures, tells Sudhir Chowdhary in a recent interview. Excerpts:
What has been the path taken by AIV since inception?
AIV started off as two separate entities. One invested in renewable energy assets and the other in start-ups. During a brainstorming session, we realised this was an inefficient method—we were generating money in one venture and deploying the money in the other. We decided to merge the two businesses and the strategy for AIV emerged. Our business model is to invest in high yielding renewable energy assets. The cash-flows which are consistent and long-term are deployed into early-stage business models that are monitored and mentored by us.
These businesses grow into large businesses giving us excellent returns on our investments which are used to buy renewable energy assets thereby increasing cash-flows and our potential to either increase the number of investments or the amount per investment. We prefer entering at the pre-revenues to early revenue stage. So far, we have acquired a 1.25 MW wind turbine in Rajasthan and invested in 54 start-ups. We had signed the definitive documents to acquire another 1.2 MW in wind energy but that transaction fell through. We are back in the market to buy 1-2 MW of renewable energy assets for this fiscal.
What are the major initiatives in the pipeline?
Our vision for 2020 is to own and operate 5-6 MW of renewable energy assets and grow our portfolio to 75-90 start-ups. Our focus is to grow our portfolio from start-ups in India and the US to include start-ups from the Asean region and the European Union. Locally, we have started initiatives to increase learning and dialogues within our nascent ecosystem. Our first initiative was the Young Funder Group where active angel investors below the age of 45 are invited to discuss the best practices that have worked for their investments. Next, we are planning an open discussion forum for entrepreneurs.
Does AIV work with e-cells? How important are they to your deal flow?
We have found that e-cells provide students and early-stage investors (like us) an excellent opportunity to see each other’s near future. The student-led start-ups learn about investor expectation and we learn about the new-age business models. Where do you source your deals from? We see 150-300 start-ups a month in our funnel. Majority of the deals we close are those that are referred to us or start-ups we have met at industry events. Next are start-up founders that directly reach out to us on LinkedIn, and finally, there are the curated start-ups from platforms such as Venture Catalysts, Lets Venture, etc.
Has your investment strategy changed in the past 12-18 months?
Two events have changed our investment outlook in the past 18 months and thereby, our investment focus and strategy. First, the Jio effect which has led to a drastic decrease in the cost to access high-speed data and has pushed the penetration of internet access to over 300 million internet users. This has led to a surge in media viewership. We have shortlisted a number of start-ups in this space as well as VR/AR space for investment and we should make a significant chunk of our new investments in this space. The second event is GST, which is a game changer for consumer and B2B goods related start-ups. Rising income increases the ability to consume, which the advent of internet has catalysed and GST has added the perfect fuel to a raging fire. We will finally see a multi-trillion-dollar market explode under GST.