Startup incubator Venture Catalysts has made the first close of its accelerator fund 9Unicorns at Rs 100 crore.
Modelled on the lines of Silicon Valley’s influential startup accelerator Y Combinator, the fund has a target corpus of Rs 300 crore. It plans to invest in over 100 early-stage startups, with the goal of writing the first external cheque.
Venture Catalysts has in the past backed startups such as BharatPe, Beardo, PeeSafe and Fynd.
9Unicorns will offer $100,000 for 5-7% equity per startup, along with a focussed three-month mentorship programme. Shortlisted startups would then be eligible for a follow-on round of $500,000 to $2 million funded by a syndicate of VCats Network and global VC funds.
“We are witnessing a surge in startups who are focused on solving Indian and global problems born out of various parts of India,” Apoorva Sharma, partner at 9Unicorns, told ET.
In a highly competitive early-stage ecosystem, Sharma says the key differentiator for the accelerator lies in its vast network of over 4,000 investors, founders and executives spread across smaller towns and cities, enabling startups to get early customers and forge distribution partnerships.
“Some investors might open franchises for the startup, some can provide infrastructure and manufacturing capabilities, some get involved in financial/insurance product distributions, many become distributors of FMCG products,” said Sharma.
As the Indian startup ecosystem matures, a new set of funds that focus on startups at ideation to pre-product stage are cropping up to tap this market. These include Better Capital, GrowX Ventures, Whiteboard Capital, 100X and First Cheque. They typically invest between $100,000 and $200,000, below early-stage venture capital firms but as the first institutional cheques in early-stage startups.
However, this stage of investment has also been a priority segment for large VC funds including Sequoia Capital, Lightspeed India and Accel.