Unicorn India Ventures Inks Strategic Agreement With Continuum Fund; Will Divest In Six Portfolio Startups

Venture capital company Unicorn India Ventures has formed a strategic agreement with US-based Continuum Fund to transfer the stakes of its six portfolio startups to the American investor for INR 50 Cr.

The six portfolio startups that Unicorn India will divest into include Genrobotics, Sequretek, Clootrack, Inc42, Inntot, and NeuroEquilibrium. These startups were initially backed by Unicorn’s first fund, which was set up in 2015 and managed a portfolio of 18 early-stage startups. 

“We have two outliers from our first fund–OpenBank and SmartCoin. We studied our portfolio and curated a list of 6 companies which we look as future winners but they need time to grow. Given that we have just finished the sixth year of the seven-year-fund, we wanted to provide an exit to our LPs. We have structured this through Continuum Fund that will provide liquidity to our LPs,” said Bhaskar Majumdar, managing partner of Unicorn India Ventures. 

Set up by Anil Joshi and Bhaskar Majumdar, Unicorn primarily invests in seed and early-stage tech-enabled startups across diverse sectors. It writes off initial cheques and follow-on investments between INR 50 Lakh and INR 10 Cr, according to its website. 

Unicorn is presently running two VC funds and also, managing a portfolio of 30 startups, per the company statement.  

“While there is a lot of noise and excitement within the startup community, the critical success factor for VCs is to be able to return capital to its investors. We are focussed on that and are proud to say we have been able to return close to 2x DPI to our investors and the TVPI is over 5x of the fund size,” Majumdar added.  

Unicorn claims that its first fund has returned the entire capital to its investors along with more than 60x partial exit from fintech startup Open Bank. It informed that it has sold 20% stake in Open Bank for $10 Mn and also exited pharma startup Pharmarack and AI startup Boxx.ai.  

Unicorn India established its second fund in 2020, with a corpus target of INR 300 Cr. Under the second fund, it has backed 19 startups to date.

The development comes at a time when India’s startup ecosystem is slowing down and simultaneously, growth as well as late-stage startups are looking for investments. 

While, sailing through the funding winter, startups seem to have lost investors’ confidence. Besides, worsening geopolitical relations and market volatility are also impacting several startups in turn, disrupting the global supply chain and begetting price inflation in the country.

As per an Inc42 report, the country’s startups have raised nearly $19 Bn funding in H1 of 2022, thereby, setting the record of raising the highest funding in the first half of a calendar year. Meanwhile, in the second quarter of 2022, these startup fundraisings declined by 37% Q-o-Q.

At the moment, a slew of investment companies have set up funds to back startups. Cactus Venture Partners’ $44 Mn maiden fund, Stride Ventures’ $200 Mn second fund, Fundamentum’s $227 Mn second fund are some examples.

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