A new India-dedicated micro-venture capital fund, iSeed, has managed to bring in backers including AngelList’s Naval Ravikant and the founders of Xiaomi, Thumbtack, Flutter, Bolt and WikiHow, as well as partners of investments firms like DST Global and Matrix Partners.
Micro VCs typically invest along with or after angel investors and in most cases with other venture funds in a funding round.
Anchored by Ravikant, a prominent angel investor in Silicon Valley, and run by Utsav Somani, India Partner for AngelList, iSeed plans to invest in 30 early-stage technology startups at an average cheque of $150,000. The fund size is nearly $5 million, according to people in the know.
“As VCs raise bigger and bigger funds, they start to invest later-stage instead of taking true early-stage risk on teams. Utsav is backing great founders in India and investing at the earliest stages,” Ravikant told ET.
iSeed will be listed on AngelList, which lets startups raise capital from accredited investors along with helping job-seekers looking to work at startups. Together, backers of iSeed have started or invested in 24 unicorns worth over $200 billion combined, as per a note by the fund.
“I was really inspired by my colleagues Ryan Hoover and Niv Dror, who went on to raise Weekend Fund and Shrug Capital respectively. Their funds have substantiated that sole partner investment vehicles behind proven operators bring great access and judgement. This trend of micro-VCs should hit Indian shores very soon and we have the infrastructure ready for this at AngelList India,” Somani told ET.
iSeed will be supported by the AngelList back-office, which makes it easy for full-time founders to run venture funds on the side, Somani said. AngelList India has backed startups including BharatPe, Open Bank, DealShare, Mall91, Yulu Bikes and since its launch made 140 investments.
“It’s a good time to do cautious investing…If you have liquidity and can time the market, access to top deals is easier and reasonably corrected valuations might help us enter the next bull market ahead,”said Somani, who will continue to lead AngelList in India.
Micro-VC is a relatively new concept in India with some active funds operational including Better Capital, GrowX Ventures, 100X and First Cheque.
However, this stage of investment has, over the past one year, been dominated by large VC funds trying to get into deals early, including Sequoia Capital, Lightspeed India and Accel.
In Silicon Valley, micro VCs are much more structured and active, including Chapter One, Work Life, Shrug Capital and Weekend Fund.