VC firm Unicorn India Ventures has made a strategic agreement with US-based fund Continuum to transfer stakes in its six portfolio startups to a US investor for INR 50 crore.
The six portfolio startups that Unicorn India will divest from include Genrobotics, Sequretek, Clootrack, Inc42, Inntot and NeuroEquilibrium. These startups were initially supported by Unicorn’s first fund, which was established in 2015 and managed a portfolio of 18 emerging startups.
Founded by Anil Joshi and Bhaskar Majumdar, Unicorn primarily invests in seed and emerging technology startups across sectors. It writes off initial checks and subsequent investments between INR 50 Lakh and 10 Cr, according to its website.
Unicorn currently runs two venture capital funds and also manages a portfolio of 30 startups, as per the company statement.
Bhaskar Majumdar, Managing Partner at Unicorn India Ventures, said, “We have two outliers from our first fund – OpenBank and SmartCoin. We studied our portfolio and created a list of 6 companies that we believe are future winners but need time to grow. As we have just completed the sixth year of a seven-year fund, we wanted to secure an exit for our LP. We have structured it through the Continuum fund, which will provide liquidity to our LPs.”
Majumdar added, “While there is a lot of buzz and excitement among the startup community, a critical success factor for VCs is the ability to return capital to their investors. We are focused on this and we are proud to say that we have been able to return almost 2x DPI to our investors and TVPI is more than 5x the size of the fund,”
Unicorn claims its first fund has returned all capital to its investors, along with a more than 60x partial exit from fintech startup Open Bank. It reported that it sold a 20% stake in Open Bank for $10 million and also exited pharmaceutical startup Pharmarack and AI startup Boxx.ai. Unicorn India launched its second fund in 2020 with a corpus target of INR 300 crore. The second fund has so far supported 19 startups.
The development comes at a time when India’s startup ecosystem is slowing down and at the same time growth and budding startups are looking for investment.
While during the financial winter, startups seem to have lost investor confidence. In addition, deteriorating geopolitical relations and market volatility are also gradually affecting several start-ups, disrupting the global supply chain and triggering price hikes in the country.
According to reports, startups in the country raised nearly $19 billion in funding in the first half of 2022, setting a record for the highest funding in the first half of a calendar year. Meanwhile, in the second quarter of 2022, these startup fundraisings fell 37% quarter-over-quarter.
Currently, several investment companies have established funds to support startups. Cactus Venture Partners’ first fund of $44 million, Stride Ventures’ second fund of $200 million, Fundamentum’s second fund of $227 million are some examples.