Unitus Seed Fund (USF), a seed-stage investment firm based in Bangalore (India) and Seattle (US), has registered its impact investment VC fund Unitus Seed Fund India (USFI) with market regulator Securities Exchange Board of India (SEBI) under the new alternative investment fund norms, and is now looking to raise the investment corpus.
USF already has Rs 20 crore ($3.3 million) of committed capital and plans to raise a total of Rs 50-75 crore ($9-12 million) from local investors to take minority positions in Bottom of Pyramid (BoP) startups, or startups serving low-income consumers.
"We see an opportunity to mobilise Indian investment capital by enabling investors to invest in new businesses that are targeting the massively under-served market of a billion Indians who get by on less than Rs 2 lakh annual family income," said Will Poole, co-founder and managing partner of Unitus Seed Fund. "There is a dearth of seed capital in this segment of the market, making the investment opportunities very attractive," Poole said.
USF, part of Unitus Group, a financial services group operating in multiple emerging markets since 2000, was co-founded by global early-stage investors and entrepreneurs Dave Richards and Poole. Early this year, it had secured over $8 million in investment commitment from Vinod Khosla (founder, Khosla Ventures and Khosla Impact), 500 Startups, Mike Murray (co-founder of Unitus Labs), Jeff Clark and Bob Gay (Bain Capital). Co-investors in India include TV Mohandas Pai (chairman of Aarin Capital Partners) and Ranjan Pai (CEO of Manipal Education and Medical Group).
The fund has already invested in nine companies in 2013 in the areas of livelihood, education, healthcare and technology for development. It plans to invest in up to 40 startups in the next few years in sectors including skill development/livelihood, agriculture, technology for development, healthcare, education and access to basic necessities.
On Tuesday, USF, along with IAN Impact, a sub-group of Indian Angel Network (IAN), a national network of angel investors investing in startups and early-stage ventures, had invested an undisclosed amount in GoCoop Solutions and Services Pvt Ltd. The company owns and operates GoCoop.com, a social marketplace for co-operatives and community-based enterprises to list and sell their produce online.
The fund has also just invested an undisclosed amount in Welcare Health Systems Pvt Ltd, an affordable eye screening services company (read here).
USF also announced that Ravi Venkatesan, board member of Infosys, and former chairman of Microsoft India, has joined as a venture partner. In his new role, he will extend his existing role on the fund's investment committee and oversee operations of the SEBI-approved fund, along with the fund's Bangalore-based partner Srikrishna Ramamoorthy.
In addition, Atul Bindal, former MD-Asia of Khosla Venture Advisory Services and former president of Airtel Mobile Services for South Asia, has joined the investment committees. He, along with Venkatesan and others, will oversee Unitus Seed Fund's domestic and overseas investment decisions.
"With our Bangalore team fully formed we are ready to step up our investment activity even higher, putting the funds that will flow in due to our new SEBI-approval to immediate use," said Ramamoorthy, partner, USF.
"We have already looked at over 200 investment opportunities this year. With the continued roll-out of Aadhaar in 2014 and mobile pushing further into the hinterlands, we expect to see further growth in the technology for development sector," he added.