Delhi-based early-stage investment firm growX ventures Management Pvt Ltd has made 18 investments in the last three years. Last year, it invested in smart network layer platform i2e1, online recipe sharing portal BetterButter.in, and online marketplace for chefs Bite Club, among others. Its portfolio includes AdSparx, a video ad-tech platform; FortunePay, an e-payments processing firm; and ShepHertz, a cloud platform for app developers in India.
Structured as an angel network of around 75 investors, growX leverages the expertise of this network for diligence, identifying opportunities and managing portfolios. As Ashish Taneja, managing director at growX ventures, says, the firm looks for a fivefold return on its investment in as many years.
In an interaction with Techcircle.in, Taneja talks about what growX looks for in a startup, its investment strategy and the opportunities it sees. Edited excerpts:
How does growX go about selecting a startup for investment?
Sheetal Bahl (the other MD) and I identify opportunities, conduct due diligence and finalise commercials. We have a four-member investment committee (IC) to validate the opportunity and take a final decision on which startups to invest. The two other members of the committee are Siddharth Talwar of Lightbox Ventures and Siddharth Dhondiyal of India Value Fund Advisors. So, we have PE experience, VC experience and startup experience, which help us take better, collective decisions.
Once a startup is identified and a decision on investment is taken, we open it up to our investor network and invite interests from them.
What is growX's investment strategy?
For every investment, we create a separate entity and we manage the investment with the entity. It's on-demand aggregation. All interested individuals come together and invest in a new entity and that fund invests in the portfolio company. We don't call for money upfront, rather we identify opportunities and then raise money.
Most of our investments are in tech companies, so the focus is to scale them up.
Our focus is to write the first cheque or to get started as earlier as possible with entrepreneurs. Mostly it is a pre-revenue opportunity, and at times, a bet on a proof-of-concept idea. We also work with our portfolio companies to raise follow-up funds.
What are the sectors that you find interesting?
I see huge opportunities in health-tech, fin-tech and ed-tech because these touch everyone's life. Online healthcare startups are yet to go beyond doctor discovery and appointments effectively, although some startups are taking some baby steps in that direction. The next phase will be about innovations in electronic medical record, online pharmacies, diagnostics and devices. Miniaturisation of devices is also an interesting area.
Unlike other on-demand services, health, education and financial services warrant some level of expertise and that's a major entry barrier for many.