“We will build new ships to carry man forward into the universe, to gain a new foothold on the moon and to prepare for new journeys to the worlds beyond our own”. The startup investment thesis of early-stage investment firm Anthill Ventures falls somewhere around this thought of George W. Bush. Launched three years back, the investment and scaling platform invests in early-to-growth stage startups.
Starting with a fund corpus of $2 Mn in 2014, some of the firm’s investments have grown by 150% in value since then. While the initial fund was invested in areas such as ecommerce, elearning, SaaS and more, the VC firm is now eyeing investment in innovative startups in the space of disruptive technologies.
“We have been around for almost three years in the ecosystem. The initial investments were mostly small ticket investments in growth stage startups, at the same time helping them scale by open up sales and distribution channels for the product, financial modelling and more. We participate in everything that is needed to successfully create businesses, so while it helps startups stay on their growth path, from the fund perspective too it is helpful in improving the ROI,” said Mahesh Balani, Partner at Anthill Ventures.
With 21 investments so far in the US, India and other Southeast Asia-based startups, Anthill Ventures is now in the process to float a $25 Mn startup fund by mid-2018. Holding on to its primary investment thesis, the firm will invest in early-to-growth stage startups but in only those building disruptive technologies. The average ticket size initially would be $100K-$150K, and it will also work with them for a period of 12-18 months. The venture firm would also like to be part of their follow-on funding rounds.
As stated by Mahesh to Inc42, “Going to the future, we will be focusing on two broad areas -Future Lifestyle, that is what lifestyle and kind of products, people will adopt in future; and Future Enterprises, means how startups will be able to cater those demands and bring forth the innovation as well as meet the needs of the end consumer.”
3 Factors Determining Startups Entry In Anthill Ventures Portfolio
First and foremost is the product itself. The product should not only be the mix of creativity and innovation but must also meet the needs of the end consumer. Howsoever good the product may be, if no one buys it, then it’s a wasted effort. Thus, the startup must satisfy the product-market fit first.
Next, comes the business plan which must highlight clearly the kind of customer acquisition costs they have, product pricing strategy, expected revenue growth and more. As Mahesh says, “Profitability may take time, but we clearly look for how the startups are planning to scale up.”
The third and the most crucial factor is the team and the background of the founder(s). “Do the founders know each other from the past? Does the team have an ability to work together and reach the deadlines? These are few things which really help in pulling the strings together during difficult situations and certainly help the startup to scale up,” he added.
A Look Upon The Anthill Ventures Current Startup Portfolio
According to Mahesh, there are many factors which determine the success of a startup. “But one of the basic difference that we find between the Indian and global startup ecosystem is that the former has clearly not been able to impact the right kind of customers and identify the right problem set for the target audience.”
He also said that although, this is getting better and Indian startups are becoming more mature and are pushing the limits of innovation, thus attracting investors. “I believe, it is only a matter of time and it requires efforts from both the investors and entrepreneurs side.” And this reflects in the portfolio of Anthill Ventures too.
Of the 21 startups, over 60% startups are based out of India, signaling a brighter side for the future startup investments in the country.
Here Are The 21 Startups Which Are Part Of Anthill Venture’s portfolio.
Early Stage VC Funding Scenario In India
Seed or early-stage funding will always be the most important funding round for startups since it helps a startup in boosting its initial journey. On the other hand, it’s also the most critical stage where most startups die.
While globally, futuristic technologies might be gaining a hype among investors, the sentiments of majority Indian investors are still concentrated across sectors such as consumer Internet, ecommerce, fintech, and enterprise SaaS. The Indian AI and Big data startups collectively gained mere $26 Mn funding in H1 2017 across 16 deals.
At the same time, the overall Seed funding scenario in the country is also on the lower side. As per Inc42 Data Labs report, in H1 2017, Seed funding witnessed a 26% fall in deals and a 68% fall in deal amount, as compared to H1 2016. Seed funding deals in H1 2016 were at an all-time high in comparison to the last two years (H1 2015 – H1 2017), with about $504 Mn being invested.
As of now, Blume Ventures has emerged as the most active VC in the space of AI and Big Data funding in India. With the rise of new age technologies, however, more investors like Anthill Ventures are also increasing their stake and risk capacity in this space.
Anthill Ventures which is looking to invest in four more startups this year, has, so far, not made any exit but is expecting to make a few exits by the end of 2018. Going ahead, as quoted above, Anthill Ventures will be looking forward to investing in the space of disruptive technologies with startups catering to the future consumer requirements in an innovative manner. However, since the new fund will also be open for global startups, how many Indian startups will be able to grab this opportunity remains to be seen.