‘9Unicorns fund size has grown from $50 mn to $100 mn’

The ongoing funding rush in the start-up ecosystem has led 9Unicorns’ fund size to grow from $50 million to $100 million. 

The accelerator fund witnessed a 3x rise in deal volume in 2021, with 101 deals. It plans to invest $0.5 million to $1 million in the idea stage and, up to $3 million in high-growth stage Series C and above startups this year. The fund has invested in startups like Vedantu, Melorra, ShipRocket, FloBiz, Reshamandi, Biddano, BluSmart, Lido, IGP.com, Faarms, and GoQii. 

BusinessLine spoke to co-founder and managing director Dr. Apoorva Ranjan Sharma about the fund’s investment strategy for 2022 and the performance in 2021.

2021 has seen a funding rush in the start-up ecosystem, with valuations skyrocketing for multiple start-ups. How did this impact the investment ticket size and fund size of 9Unicorns? 

The startup landscape has been an overachiever in 2021 as well with the creation of 46 unicorns, placing India in the third spot amongst the largest unicorn hubs, globally. With the backing of incubators, accelerators, and early-stage investors, this emerging space has picked up pace in India and is expected to continue the momentum in 2022 as well. 9Unicorns witnessed a 3x rise in deal volume in 2021, with 101 deals. 9Unicorns invested in over 90 unique startups with a total round size of $465 million in 2021, with $32 million as stand-alone investment. With the expansion of the ecosystem, the minimum ticket size has grown from $100,000 to $500,000, with the maximum ticket size going up to $ 1.5 million. The follow-up rounds size has also touched $1.5 million. The two-year-old fund has already committed 25 per cent of its fund in high-growth Series C and B enterprises in 2021. The fund size has also grown from $50 million to $100 million to meet the relevant requirements. 

How many startups does 9Unicorns plan to fund this year? Are there any specific sectors that you are interested in? 

We have mapped out a fresh and extremely unique funding strategy, in which we will invest in both idea-stage and Series C firms. It plans to invest $0.5 million to $1 million in the idea stage and, upto $3 million in high-growth stage Series C and above startups. The fund will focus on high-potential businesses with unique value propositions. Fintechs will continue to dominate investor preference, with sunrise sectors such as blockchain and cryptocurrencies leading the way. 

In 2021, you have deployed 25 per cent of the capital in high-growth Series C and B startups. What would be the split between early stage and high-growth companies this year? 

The proportion of investments is the maximum in idea-stage funds to the tune of 50 per cent, 25 per cent of the funds are allocated towards the follow-up stage funding and the remaining 25 per cent is invested in high growth series C funding. 

How is an accelerator fund different from a venture capital fund?

Accelerator funds, often known as startup accelerators, are group-based, fixed-term programs that incorporate seed funding, mentorship, industry connections, and educational components to help a startup expand faster. A venture capital fund, on the other hand, is a form of investment fund that makes investments in market evolution companies with a high return potential but significant risk. A venture capital firm manages the fund, and the investors are typically institutions or high-net-worth individuals. 

Venture capitalists assist in the creation of a firm from the ground up and frequently provide hands-on support in areas such as marketing, logistics, technology, talent, and more. Accelerators, on the other hand, place a greater emphasis on education, networking, co-working spaces, mentoring, and fundraising.

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February 20, 2022