Last week, 1Crowd was in the news for closing its first investment of $150,000 in Pune-based advertising technology firm ProximiT. Run by Zeva Capsol Pvt Ltd, the crowdfunding platform was founded in September 2015 by four former bank executives â€“ Anil Gudibande, Anup Kuruvilla, Amit Ratanpal, and Natasha Kothari â€“ with the objective of connecting investors with promising early-stage ventures. Gudibande is an ex-Citigroup and Royal Bank of Scotland executive while Kuruvilla earlier worked with Citibank, Chase Manhattan Bank and ABN Amro/Royal Bank of Scotland. Ratanpal is founder and MD of investment company BLinC Management Advisors while Kothari has earlier worked with Royal Bank of Scotland.
In an interview with Techcircle.in, Gudibande speaks about 1Crowd's potential investees and its plans to set up incubation centres across the country. Edited excerpts:
What are your other investments in the pipeline? What are the segments you are looking at?
1Crowd co-invested in ad-tech startup ProximiT along with 20 investors. That was our first transaction. We are about to close two more transactions in about two weeks' time. Funding has been raised for both the transactions, but they are in the documentation stage now. We have a fourth transaction that's just been launched. We are geared to do two to three transactions a month with the kind of resources 1Crowd has today. We expect to see a very busy calendar.
These four transactions are in the media and digital space, health-tech, fin-tech, and social space. We are a sector-agnostic platform. We are looking to do a wider variety of transactions.
What is your ticket size?
There's no ticket size as such. It all depends on the market scenario and that particular opportunity.
Is 1Crowd looking to raise money?
1Crowd is a fully self-funded platform. Currently, all the founders have put in their money and that's sufficient enough to pay for all these transactions.
How many investors are there on your platform?
We have about 300 investors on our platform. Most of them are high-net worth individuals (HNIs) individuals who have registered on the platform as angel investors. We've also got investors from Hong Kong, Singapore, and Dubai. 1Crowd has a mix of both Indian and foreign investors.
There are several crowdfunding platforms in India now. What is unique about 1Crowd?
What differentiates 1Crowd from others is our ecosystem that has been built around "commoditised" fundraising. Our ecosystem spans the entire spectrum -- deal origination, structuring capital raising, guidance on building business plans and financial models, screening proposals, due diligence, providing access to investor members, deal closure, mentoring, post investment monitoring and exit. Startups get access to a pool of mentors who can help nurture their business. We have also tied up with other service providers such as legal firms, accounting firms, chartered secretaries and more as we don't want startups to waste time looking for services in these areas.
Our co-investing model is extremely important and differentiates ourselves from other crowd funding platforms. We sit on the board of these startups and actively engage with them. For instance, in case of ProximiT, I am on the board of this startup.
How does 1Crowd's business model work?
1Crowd's business model is one where we are completely aligned with the investor. It's a carry-based model and that is the crux. Our cash flows come only if investors make money, then we have a carried interest. The money we (1Crowd founders) invest in a startup comes from our capital. We invest money in return for a stake. Over a period of time, we would have cash flows of our own too. Our contractual obligation to all our investors is that1Crowd will co-invest in every transaction. We will not show them a transaction where we will not be putting in money ourselves.
What are your other plans for 2016?
1Crowd is also looking to set up 8-10 incubation centres in India over a period of time and have sector-focused centres. There's lot of activity in the fin-tech, health-tech, ad-tech, Internet of Things (IoT) markets; so these are the areas where we are looking to offer expertise. For incubation centres, groundwork is afoot right now, and by Q3 we should see the rollout. These centres are expected to incubate 10-12 startups in a year.