Unitus Ventures Marks The First Close Of Its $45.2 Mn Fund II With $15 Mn

Unitus Ventures (formerly known as Unitus Seed Fund), an impact venture fund investing in early-stage startups, has announced to have raised $15 Mn (INR 100 Cr) towards the first close of its $45.2 Mn (INR 300 Cr) Unitus Ventures Fund II.

The fund will be utilised for onward investing of $753K – $2.2 Mn (INR 5 Cr -INR 15 Cr) each to 25 to 30 startups specialising in education, healthcare and inclusive fintech.

Existing investors Michael and Susan Dell Foundation, Bill Gates, Hemendra Kothari from DSP BlackRock, Sify cofounder Padma Chandrasekaran, Bank of Baroda Chairman Ravi Venkatesan among others participated in Unitus Ventures’ latest fund.

Commenting on the development, Unitus Ventures Partner Srikrishna Ramamoorthy said, “We are now raising twice as much to invest in entrepreneurs and teams that are creatively tackling some of India’s unique challenges in healthcare, education and access to finance.”

“The opportunity to bring together private capital and market-based principles for social change is significant,” said Bill Gates, co-founder of Microsoft. “I’m optimistic about the growth prospects in India and am pleased to invest again with Unitus,” he added.

Founded in 2013 by Dave Richards, Will Poole and Srikrishna Ramamoorthy, Unitus Ventures closed its first fund in 2013 at $21 Mn (INR 140 Cr) and made 23 investments in early-stage startups like edtech startup Hippocampus Learning Centres, mobile based safety applications BetterPlace, online taxi rental company DriveU, etc.

“The Fund I has begun returning capital to investors from secondary exits in Cuemath and two other acquisitions. Overall, Unitus Ventures’ 14 active investees have already directly impacted over 1.2 million low-income lives across 21 states in India, displaying a 102% growth in 2017,” said Unitus in an official statement.

From the Fund II, Capria Network-backed Unitus Ventures has already made six investments in startups including operations and manpower outsourcing startup Awign, healthtech startup Predible Health, English learning app Utter, AI product company i3 Systems, etc.

In its new investment strategy, Unitus Ventures is betting that India is an archetype for global emerging markets and is the best market to prove scalable products and services for mass low-income consumers.

Once well-established in India, select portfolio companies can expand to emerging markets in South East Asia, Africa and Latin America. Reaching global scale requires targeting the mass market in India which has insatiable but hard to service demand.

“A critical success factor is that products, services, and distribution channels need to be built ground up and at highly-affordable price points, which calls for an inventive and entrepreneurial drive and frugal innovation. Once these innovations have succeeded in “India First”, Unitus will help its startups avail themselves of the even larger “Global Next” opportunity,” said Unitus spokesperson.

Let’s take a look at the current scenario of the key sectors which Unitus is banking upon:

• Google, KPMG reports suggest India’s online education to see approximately 8x growth in the next five years and may make a significant impact on the edtech market that has a potential to touch $1.96 Bn by 2021 from the current $247 Mn.
• Similarly, Indian healthcare is expected to become a $280 Bn market by 2020, from the current $100 Bn, according to latest IBEF reports. The Healthtech witnessed 111 deals and investment of $333 Mn in 2017, thrice the amount raised in 2016, as per Inc42 DataLabs’ Indian Tech Startup Funding Report 2017.
• Indian fintech sector also continues to witness the highest funding, as per Indian Tech Startup Funding Q1 2018 report. Even 2017 saw massive investments in this space i.e. infusion of $3.01 Bn across 111 deals.

Most recently, in April 2018, Bengaluru-based venture capital firm Saama Capital, also announced the closure of its fourth fund with a corpus of $100 Mn. In 2014-2016, it backed about 10 companies, including cold-pressed juice maker Raw Pressery, sauce and condiments startup Veeba Foods, online lender LendingKart, and artificial intelligence-driven travel assistant startup Mezi.

Other Indian Venture Capitalists investing in early-stage startups include FundTonic, India Quotient, Alteria Capital, 1Crowd, amongst others.