Bengaluru-based technology venture capital fund Chiratae Ventures aims to disrupt the seed funding space with Chiratae Sonic, a seed funding programme that guarantees a 48-hour turnaround time on requests for investments up to $500,000.
Sudhir Sethi, Founder and Chairman, Chiratae Ventures, says entrepreneurs in India are building companies on a bigger scale and in shorter time frames. This makes it important for VCs to look into newer companies and take a call quickly so that the process does not take months.
Sudhir Sethi, Founder and Chairman, Chiratae Ventures
According to Sudhir, 48 hours is a decent time period for smaller transactions, and Chiratae Sonic is the “firm’s first attempt to enter the venture technology world where seed investments are quicker”.
“As a venture investor, we have to demonstrate agility, speed, and obviously substance in terms of how fast we can inform the entrepreneur about our decision,” Sudhir says.
The founder says there are “no boundary conditions” on how many startups can be funded by the Chiratae Sonic programme. However, the firm is essentially looking at sectors like agritech, gaming, consumer tech, fintech, healthtech, SaaS, and companies that have the potential to transform themselves through digitisation.
Technology is of utmost importance as it enables a company to disrupt and grow much stronger. Additionally, the firm is looking at “companies that have products that could be taken on an international scale”.
“We are looking at anything new or disruptive using technology to solve challenges that were not solved earlier.”
Looking for global products
Sudhir says around 2,500 to 3,000 new companies are noticed every year by the firm, a number that is likely to go up to 5,000 a year in the next two years. The fund wants to associate with innovative entrepreneurs who have disrupted the spaces of technology, product, business model, or revenue model.
About 40-45 percent of the companies the firm looks at have a global footprint in more than 60 countries, Sudhir says, and include Cult.fit, Lenskart, PlaySimple, Rentomojo, etc. Indian companies are producing products that are globally relevant, competitive, and can get a global market share – this is what Chiratae is primarily looking at.
Sudhir says the firm invests around $100-150 million and divests on a scale between $75-100 million every year. The active portfolio includes 60 companies, with combined revenue of about $1.2 billion and a valuation of approximately $11 billion.
In 2020, the revenue of the portfolio companies grew by 23 percent while valuation grew by 46 percent. Around 42 of the 60 companies grew faster during the pandemic, which shows that technology or funds promoting technology are growing faster in India.
“Entrepreneurs are agile so the VC has to be agile; there is no question about it,” he says.
According to him, there are inflationary increases in early-stage valuations every year, which is “perfectly normal”.
Sudhir says the firm is hiring at the moment and aims to grow to a team of 30 from the current 21 people. “We want to make sure what we are doing becomes the higher scale,” Sudhir says.
