Over the next three-four years, Mumbai Angel Network targets to invest ₹500 crores each year into Indian start-ups. This is a significant jump given that the angel investment platform closed FY22 deploying ₹100 crores across 60-63 early-stage start-ups.
In the upcoming financial year 2023, the platform is doubling its target corpus for deployment to over ₹200 crores across 60-70 bets at various stages and not just early stage, Nandini Mansinghka, Co-founder and CEO, Mumbai Angel Network told BusinessLine.
“We are targeting that over the next 3-4 years’ time, we want to build the muscle to invest about ₹500 crores per annum. Today we have a portfolio of 200 companies, by then we want to have 500 companies in the portfolio,” she said.
Last fiscal FY22, the platform invested across 24 sectors, the prominent among which include EV (clean tech), edtech, medtech and life sciences. “There was a lot of noise around Web 3 and blockchain but we haven’t been able to identify any strong business models in these areas yet. India consumer story is big too, not-tech based but just brands especially food brands,” Mansinghka said.
Consumer brands is a prominent area for Mumbai Angels covering nearly 30 per cent of its current portfolio and rest 70 per cent is tech-based start-ups. Some of platform’s top consumer brand investments include Purpelle and Vadham Teas.
“Purpelle is one of the portfolio companies which have grown really big. We were its first investors when the company was valued at ₹2 crores and now it is valued at $700 million.
Vadham Teas is one of our investments, we are seeing increasing interests from our investors in these lifestyle and food brands,” she said.
Mansinghka added, “Going ahead, some sectors we are seeing lot of interest is space tech, defense tech and Web 3. I would want whole bunch of innovative companies coming out of the Web 3 space. Another interesting sector to watch out for is Agritech. A lot of innovation is happening on the ground. We invest at first institution levels, and are able to catch a lot of these trends a year before the VC firms.”
Investments so far
In its 15 years of existence, Mumbai Angel Network has made over 200 investments and has seen over 100 exits and next rounds. Across these bets the platform saw 35 per cent IRR (internal rate of return) on average.
The average ticket sizes of deals are between ₹1-10 crores. Last year onwards, the platform has started closing a million-dollar deals. It currently has a network of over 700 investors globally and has an average holding period of three to five years in each investment, though it is increasingly suggesting that the early-stage investors remain invested for longer periods to achieve “disproportionate” gains.
Mumbai Angels receives around 800-1000 pitches every month, which then gets filtered through system of 100 parameters-based algorithm and later the investment team. “We then throw it open to our 700 members of which 30-50 people will show interest, that is less than 10 per cent of our network. After the soft commitment, we have 70 per cent chance of the deal going through. After that legal and financial due diligence happens, around 15-20 investors ultimately participate,” Mansinghka explained.
She added, “Again sometimes, a company is raising say ₹30-40 crores wherein we say let us raise ₹10 crores for you. So we have started doing part mandate for a lot of companies. It’s a big strategy for us going ahead.”
Mumbai Angel charges fees from both investors and start-ups. It also invests in each start-up by taking a stake. “We reinvest a part of the fee we get from start-ups. We charge around 5 per cent as fee of which 2 per cent is stake and 3 per cent is in money.”
Published on
April 14, 2022
