Exclusive: Unicorn India Makes Its First Cross-Border Investment With Unicorn Ascension EIS Fund

Mumbai-based early-stage venture capital firm Unicorn India Ventures, with its cross-border evergreen fund — Unicorn Ascension Fund — has invested an undisclosed amount in London-based Custom Materials Ltd, the parent company of Moteefe, a social commerce startup.

Early-stage investors of Moteefe including Ascension Ventures, Livingbridge, and Force Over Mass Capital (FOMCAP) also participated in the round. The startup plans to use the fresh funds to expand its services in India by Q3/Q4 2019.

Founded in 2015, Moteefe is a B2B2C social commerce platform and provides an end-to-end solution for monetising social presence with a white-label store technology, custom design tools, production and fulfilment network along with customer support. It is providing a solution for entrepreneurs, brands, clubs and influencers to sell customised products through social media.

The business launched over 350K campaigns for customers in 2017 with 1000s of sellers worldwide.

Bhaskar Majumdar, managing partner, Unicorn Ascension Fund said, “This is UAF’s first investment and we are very excited to have started our journey with Moteefe, as not only has it managed to scale sales in the UK, but they also have a well formulated and focused strategy for entering the Indian market.”

Founded by Anil Joshi and Bhaskar Majumdar, Unicorn India is a Securities and Exchange Board of India (SEBI) registered venture capital fund. In India, after nearly 20 investments from its first fund of 2015, Unicorn had also launched its second fund, a venture debt fund with a corpus of $83.4 Mn (INR 600 Cr) in November 2017.

Unicorn India: Taking Leap Into The Cross-Border Startup Ecosystem

In June 2018, Unicorn India partnered with Ascension Ventures to launch the cross-border fund with an aim to support UK-based startups looking to enter the Indian market. The fund is structured as an open-ended enterprise investment scheme fund and aims to raise up to £5 Mn, or about $6.28 Mn (INR 45.2 Cr), per year.

Under the Unicorn Ascension Fund, Unicorn India is looking to invest in six to eight UK-based Pre-Series A stage startups, building products and services relevant to the Indian market. Startups that are B2B or B2G (Business to Government) will be evaluated for investment under this fund.

The fund is looking to invest with a ticket size of £500K – £750K ($631.2K-$946.7K), as a co-investor in rounds that are between £1 Mn ($1.2 Mn) and £3 Mn ($3.78 Mn).

The fund will invest across sectors including Internet of Things ( (industrial and home), Hardware (robotics and automation systems, scanning and security systems, defence equipment), Security and surveillance applications, AI-driven software assistants in logistics, travel and hospitality etc.

It will also invest in Fintech (payments, forex, trading, financial research), Edtech (content, online learning platforms), Healthtech (smart devices, preventive healthcare products) Agri-tech (surveillance, smart irrigation, robots), ecommerce and Software as a Service.

Why Unicorn Ascension Fund Is Valuable To India And UK Startup Ecosystem

The partnership came with the complementary nature of offerings of both Unicorn India and Ascension Ventures. To begin with, Ascension provides more than six years’ experience in the Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) ecosystem in the UK and its network of co-investment partners includes the UK’s leading VCs.

At the same time, Unicorn India Ventures will provide UAF portfolio companies with a strong network of successful entrepreneurs, senior corporate professionals, senior government representatives, domain experts, VCs/investors, which they can leverage to launch products and services in India.

Also, Unicorn India’s ties with corporates, SMEs, government departments and public-sector organisations in India will also benefit the portfolio companies of Unicorn Ascension Fund.

As EIS fund, Unicorn Ascension fund also provides a variety of tax benefits available to UK tax paying individuals, subject to their investments complying with the relevant conditions and requirements. These include  30% EIS Income Tax relief, deferral of capital gains tax, no income or capital gains tax on realisations of EIS investments, relief from EIS loss among other benefits.

India And UK: Merging Synergies Towards A Better Future

With India’s startup ecosystem ranking third in terms of size in the world, international collaborations have been on the rise, with many countries extending support and opportunities to Indian entrepreneurs.

Even after Brexit, UK – the fifth-largest economy in the world – remains a favourite destination for Indian startups and enterprises. According to Prime Minister Narendra Modi, the India-UK partnership is an unbeatable combination.

The two countries have been focused on development partnership, as part of which UK prime minister Theresa May and Modi signed a Memorandum of Understanding (MoU) to develop a technology hub in New Delhi and pair businesses, universities, and tech institutions across the two countries to exchange synergies.

The countries recently hosted the UK-India FutureTech Festival in Delhi and also announced UK-India Fast Track Startup Fund to invest in technology-led startups in areas such as fintech, edtech, agritech, healthtech, technology-driven manufacturing, etc.

Rhiannon Harries, Director, Trade and Innovation – South Asia, UK told Inc42 the key aspects of India-UK tech partnership which include Tech Hub, Tech Cluster Partnerships, Joint Healthcare AI pilot and Fintech Rocketship Awards.

The National Association of Software and Services Companies (NASSCOM) and techUK had earlier launched the UK-India Tech Alliance and agreed on an MoU, which will see the technology sectors from the UK and India further strengthen their relationship.

With both governments smoothening the road for collaboration, investors like Pi Ventures, CDC group, Blume Ventures along with Unicorn India Ventures have changed the flow of investments by going to the UK to collaborate with the next generation of tech companies.