Alpha Wave Incubation (AWI), an early-stage $300 million fund managed by Falcon Edge cofounder Navroz Udwadia, plans to set up an India investment and operating team for its newly formed corpus, people directly aware of the matter said.
The fund is anchored by ADQ, the state-owned holding company for Abu Dhabi’s non-oil sectors as its sole Limited Partner or sponsor. AWI has in the last few months been one of the most active dealmakers, with more than five deals closed and another five in the pipeline, the people told ET.
The cheques that have been finalized include financial services company Avail Finance, AI-based online customer research startup Entropik, video engagement platform Hippo Video, customer support automation platform Verloop.io, and solar-focussed drone technology analytics startup SenseHawk.
“AWI is building out an India and Abu Dhabi team of somewhere between 10 and 12 people at the outset, including a program manager, a CFO, controller, etc to provide the portfolio assistance on product market, strategy, and hiring,” said a person aware of the fund’s plans.
This comes at a time when the early-stage investment ecosystem in India has become highly competitive, with large funds setting up programmes and initiatives to lure high-quality founders.
Beyond the startups, AWI has also committed to backing five additional companies in the next cohort in the ed-tech, beauty and fashion, and grocery social commerce space.
The final contours of these deals are under way, the person quoted earlier in the story said.
AWI has a unique investment model. The fund backs founders from India and Southeast Asia and asks them to set up a second headquarters in Abu Dhabi, and in some cases, the region acts as a base for launching operations in the Middle East and North Africa. ADQ’s bigger motive is to promote technology-led entrepreneurship in the region.
“Today, we are largely India and US focussed…AWI would help us tap into the middle eastern market where there is a lot of investment happening in solar,” said Rahul Sankhe, cofounder, Sensehawk. Sensehawk which plans to expand its team from 60 to 100 people in the next three months, will set up an office with 20-30 employees in Abu Dhabi.
“AWI will capitalize and provide incentives to each portfolio to move 5-20 early employees to Abu Dhabi,” said another person directly aware of the fund’s plans. “The goal is to move high-quality talent like data scientists, product engineers, specialists in artificial intelligence and machine learning, while at the same time providing a pool of capital in the Indian entrepreneurial ecosystem that’s arguably undercapitalized,” he said.
In fact, beyond its investment in AWI, its Limited Partner ADQ is also looking to build a direct presence in India with a focus on early to mid stage stage investments, and selective fund investments. Over the last few years, the UAE has set up multiple free-trade zones that offer businesses 100% repatriation of capital and profits, no corporate tax, multiple business activities in a single licence, and issue of licences in 2 business days.
“Abu Dhabi has very reasonable flight times to China, India, even to Europe…the English language is fairly well spoken… there is high disposable income, and with the right resources, the leadership wanted to find a mechanism to make the region an entrepreneurial hub to rival Singapore, Tel Aviv, Bangalore and eventually Silicon Valley,” said another person who is also aware of its plans.