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IIFL Asset Management’s IIFL Seed Venture Fund 1 focuses to invest in companies that use technology to improve efficiency of their businesses. Technology has changed the way people communicate, educate and transact, among others. It has also, to some extent, changed the way people run their businesses.
Prashasta Seth, senior managing partner at IIFL Asset Management, said the venture fund looks at companies which have used technology “to disrupt a part of the existing way of doing business and in the process got a clear lead over existing players”. He added that 60-100 per cent of the fund has been allocated to tech and tech-enabled opportunities and up to 40 per cent has been dispersed to non-tech opportunities.
The venture seed fund has invested in companies such as Kogta Financial (India) Ltd, Poncho Hospitality Pvt. Ltd, Uniphore Software Systems Pvt. Ltd, Shopsense Retail Tech Pvt. Ltd (Fynd) and is looking to crack more deals in the coming months.
According to Seth, these companies were able to benefit as they were able to attract sound follow-on investors. “In FY19, three of our portfolio companies attracted new investors at valuations much higher than our entry valuations.”
Uniphore, the artificial intelligence-powered conversational platform, has been in news for scaling up. Recently, it raised $51 million in Series C round of funding. Shopsense Retail Tech Pvt. Ltd hit the Indian business bulletin after Reliance Industries acquired 87 per cent stake in the company.
The aim of the venture capital fund is to provide capital to entrepreneurs so that they are fully focused on running the business and executing ideas. The key sectors on which the fund invests include financial services, consumption, life sciences, healthcare and technology.
Supporting Start-ups Beyond Investment
Besides investing in start-ups, IIFL Seed Venture Fund 1 also plans to help companies identify key sub segments in their businesses. The motive is to handhold start-ups so that they can get whatever it takes to flourish and scale up. Seth says, “We also help companies identify their core competences and leverage them further. We guide businesses towards identifying newer markets and breaking entry barriers.”
IIFL Asset Management also launched its private equity arm—IIFL India Private Equity Fund—which has committed a capital of INR 950 crore. The private equity fund a few days ago led a funding round of INR 40 crore in Mumbai-based craft beer maker, White Owl breweries.