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Having grown up in the state of the royals – Rajasthan, Sushil Sharma couldn’t see himself working in crowded cities or tech hubs. Even though he landed himself various opportunities in India as well as abroad, he stayed back in his hometown, Jodhpur, and worked with several startups.

Along with Devesh Rakhecha and Richa Sharma, Sushil saw that the future lies in small towns as that’s where the next billion users in India reside. This, the founders say, is proving to be true since 2020 as the whole world has become location-agnostic, and startups can come up with innovation while based anywhere in India.

“India is at a right stage for startups, and the ecosystem in cities beyond metros is becoming stronger for creating wealth through startups,” Sushil tells YS.

So, he took a mission to create a startup ecosystem and co-founded Marwari Catalyst Ventures (MCats), which started as an angel network in June 2019. In two years, MCats has evolved into an accelerator with a mission to impact 1,000 startups by the end of 2022.

The Founder and CEO adds that accelerators play a vital role in the startup journey as they are the growth partners, not only in fundraising but leveraging technology, hand-holding, mentorship, network opening, and market connect. “Globally, accelerators have helped startups such as Airbnb, DropBox, and Reddit grow rapidly to billion-dollar companies. And now, it is time for unicorns from all states of India”, he says.

India has been minting startup unicorns at a record pace, with 15 companies already crossing the billion-dollar valuation in 2021 – which is more than the number of unicorns in 2020, and many more are expected before the year wraps up.

That’s why Co-founder Devesh Rakhecha, an ex-investment banker and CA, adds that this is the best time for investors to keep an eye on deeper pockets, as innovation and problem-solvers crop up more than ever.

Two years, 20x return

Rachit Poddar and Raunak Singhvi later joined Jodhpur-headquartered Marwari Venture Catalysts as co-founders. In two years, from just 10-12 startups from Rajasthan, MCats now boasts to accelerate 30 startups, with more than 80 founders from across the length and the breadth of the country and one exit, and is now in the process to add 40 more startups across categories by end of this year, especially from Bharat.

Speaking about how the accelerator has grown in the last two years, Sushil says that earlier, they only had investors based in Rajasthan or Jodhpur, and now, the investor pool includes HNIs, startup founders from Gujarat, Punjab, Delhi, Hyderabad, Maharashtra, and so on.

“The MCats team decided to democratise entrepreneurship and startup ecosystem to smaller cities, where opportunities are plenty and unutilised,” he says.

He claims that besides enabling seed and Series A investments, Marwari Catalysts helps startups develop capability, create market access, and leverage its network across the globe such as the UK, Hong Kong, Middle East, Africa, Indonesia, Singapore, and Vietnam through its partners. It also gives strategic guidance and helps investors get phenomenal returns, in turn bagging successful exits.

“MCats has scaled up despite the pandemic, giving stellar returns as one of its portfolio companies bags successful exit, with 20x return,” says Sushil.

Some of the startups in its portfolio include Yearbook Canvas, The Book Cafe, Startup Chaupal, Sarathi Healthcare, Mentorkart, Toppeq, Valuationary, Hobit, TechieNest, Tyutee, Refier, among others. Co-founder Raunak claims that MCats’s portfolio, as well as its team, comprises CAs, IIT and IIM graduates, serial entrepreneurs, and angel investors.

At present, MCats is focusing on growth-stage startups, with early market validated revenues and early traction as growth partners. The shortlisted startups usually receive funding between Rs 15 – 50 lakh from the MCats network.

“We are purely an accelerator working on Y-Combinator and Techstars model, having professionals with skin in the game. We help startups in entrepreneurship knowledge, networking, technology, marketing, communication, financial, legal and compliance restructuring,” tells Devesh.

Sushil says that with the influx of youth back to hometowns and the growing startup culture in all parts of the country, more than 1,000 startups reached out to MCats for acceleration.

Since the pandemic moved education online, the MCats team is leveraging it with a separate edtech accelerator programme called ‘Thrive’, which helps edtech startups to strengthen innovation, become market-ready and scale their businesses to solve global challenges in 12 weeks. 

“Building on what we did over the past two years, we are committed to being a catalyst and a partner in unlocking the possibilities for a digital India, and MCats sits at the right juncture to enable acceleration while fueling innovation and economy in India,” says Raunak, a CA and former executive of the likes of BCG and KPMG.

Besides putting the spotlight on the startup ecosystem beyond the metros, Co-founder Richa, an IIM Bangalore alumna, also emphasises that one of the key missions of MCats is to empower women entrepreneurs, with half of the founders in its portfolio companies being women.

Funding and acceleration

The accelerator re-closed a round of funding to the tune of $2 million, concluded by HNIs from India, Japan, the UK, the US, and Indonesia. It is now in the process of raising $4 million at a valuation of $25 million.

“More than 70–80 percent of our investors come from Tier-II, III, and IV cities. Globally, existing investors are from the US’ Silicon Valley, the UK, Muscat, Abu Dhabi, Hong Kong, Singapore, Indonesia, Vietnam, Japan etc. A lot of micro-VC funds, family offices, CXOs, and startup founders also co-invest with us,” tells Rachit. Besides this, he says that more than 60 percent of its portfolio startups have raised seed funding and are now on the cusp of raising the pre-Series A round.

“We are now open for strategic partnership with angel networks, HNIs, family funds, VCs, and PE funds as well as renowned names from the startup ecosystem for uplifting people and economies through entrepreneurship,” he adds.

Sushil says the only growth strategy that matters at MCats is collaboration, team, and impact. He is sure that he and his team will impact thousands of startups, women entrepreneurs, and enable innovation from the remotest places in India.