Delhi-based Radar Capital was born out of a simple realisation: several investment banking firms are operational but most are averse to working with small companies.
The lack of an entrepreneurial mindset in many investment bankers – most only want to serve “settled” businesses –compounds this problem.
Radar Capital, a boutique investment advisory for startups and high-growth enterprises founded in 2018, aims to solve this issue.
“We have brought in a hands-on entrepreneurial approach to this sector,” says Rahul Gupta, Founder and Managing Director, Radar Capital.
Rahul, who has been through most of the challenges of a bootstrapped entrepreneur, related to branding, fundraising, and survival, believes his background gives him a unique understanding of this space.
Rahul Gupta, Founder and Managing Director, Radar Capital
“Additionally, we understand that each startup is unique and needs a bespoke strategy for growth. This is why Radar has unique solutions for each of its clients,” Rahul says.
Radar Capital is involved in fundraising and growth advisory for its clients. It handholds entrepreneurs and guides them on product development, marketing communications – and ultimately fund raising.
“We operate from seed to Series A and also we do LP (Limited Partners) deals for VC funds,” Rahul says.
The portfolio and report card
Radar Capital now employs a team of 12 people, with Rahul leading strategy and business development while the rest of the team is involved in data mining and research.
Rahul, who holds an MBA from SPJIMR (Mumbai), is a seasoned entrepreneur with success in four ventures spanning higher academic publishing, trade expo/events in the kids’ space, and movie production. In 2003, he started management education startup Biztantra, and in 2012 launched World Children Expo, India’s first B2B/B2C event platform for children’s brands.
The idea for Radar Capital came during a conversation at a trade event, and he began work to “help entrepreneurs succeed”.
In the last two years, the firm claims investments in its startups have grown 10X.
Its portfolio includes Smartivity, Avishkar Box, Coffee Bond, Clevergene Biocorp, and Pikapika. Recent startups are ZFW Hospitality, EduGorilla, and Made Easy Group. All startups – and entrepreneurs – have received guidance that has helped them grow.
Radar Capital has worked closely with edtech startups Smartivity and Avishkar Box – from seed-stage funding. It facilitated an early-stage investment of Rs 60 lakh from S Chand group into Smartivity, which has since then raised a total of Rs 22 crore. It is currently valued at Rs 100 crore – a jump in valuation from Rs 2 crore to Rs 100 crore in four years. The estimated revenues of Smartivity stand at Rs 20 crore for FY 20-21.
The advisory firm was also instrumental in facilitating pre-Series A funding of Rs 5 crore into Avishkar Box from Auxano Trust. The edtech startup’s revenue stands at Rs 18 crore, a jump of 800 percent from the initial Rs 2 crore, and it is valued at Rs 100 crore at present.
Speaking about Coffee Bond, a Delhi-based coffee shop, he says Radar facilitated pre-Series A funding of Rs 1.5 crore from Auxano Trust in January 2019. Its revenue jumped from Rs 80 lakh annually to Rs 3.23 crore in one year, and their “footprint has grown from one cafe to 13 outlets of sale”.
Genomics startup Clevergene Biocorp closed a pre-Series A funding round of Rs 4.5 crore from Auxano Trust in November 2019 and saw its revenue soar from Rs 2 crore to Rs 7.8 crore in FY21.
“Clevergene is looking at raising $10 million for the next phase of growth, and Radar Capital has the exclusive mandate for this,” Rahul says.
In October 2020, the firm raised Rs 1 crore from Auxano Trust for Pika Pika, an app that can help censor content on phones for kids.
Radar Capital is now working with cloud kitchen platform ZFW Hospitality, for which it raised a pre-seed funding of $150,000 in April. Next up is raising $1 million as part of the startup’s pre-Series A round towards the end of 2021.
“We have invested over $7 million in all till date. The market value of these investments is more $25 million as of today. As of now, the company is providing LP investors to upcoming VC Funds,” Rahul says.
The way ahead
Rahul believes that seed-stage funding has matured in India.
“A big number of individual investors are very bold. Indian family offices, generally very conservative, are also interested in startup investments. Successful entrepreneurs like Kunal Shah, Kunal Bahl, and Rohit Bansal are also among the biggest seed-stage investors,” he says.
As of now, the investment firm’s revenue is pegged at around Rs 1.75 crore annually (FY21), including success fees, consultancy, and returns on its own investments.
“The market size for venture/growth capital is at $10 billion. Radar’s favourite sectors are the edtech/children’s space, with a keen eye on health tech/consumer tech as well,” Rahul says.
The competition in India includes investment banks and angel investment ventures like LetsVenture, Indigo Edge, Venture Garage etc.
“Radar’s USP is that it provides brand consultancy, business development, revenue development services other than mentoring and fundraising activities. We are sector-agnostic, though edtech is one of our favourite sectors.”
The future of Radar Capital is in “setting up its own fund for startups”, and the firm aims to launch a $30-$40 million fund in the next two years. “We are also closing Limited Partners (LP) for a Rs 150 crore fund for a client,” Rahul says.
Radar Capital has plans to launch a YouTube channel called Termsheet in July 2021.
“This will be an interaction with entrepreneurs who have faced challenges and built companies. The channel aims to discuss a plethora of challenges for the startup community other than just money – marketing, communications, interpersonal dynamics, and more,” Rahul says.
