"EDITION 74"

Published: 6/5/2020

Slightly late Thursday edition but good morning to all of y'all. Bunch of memes & news in the last 24 hours, including this one- https://twitter.com/chetanp/status/1262990694211149826, but also Shopify announced a bunch of new stuff today- paying over installments, cross border selling & even a business banking product called Shopify Balance. Coming to the day's news, a brand new micro fund in India & exits for VCs (though partial)

  • https://bit.ly/3cTpoSu: India-focussed micro fund backed by Naval & others
  • ➡️ Utsav Somani, who works AngelList India, has launched a micro-fund for his personal investments in the Indian startup ecosystem. The fund's size is nearly $5M and Utsav plans to write 30ish $150k checks into early stage companies.

    ➡️ So what exactly is a micro-fund? Well we've seen this phenomenon in the US where top founders or operators or smaller firms raise <$100M funds to invest in pre-seed and seed stage companies. And while the micro-fund ecosystem has exploded in the US, it's still at a nascent stage in India (Firstcheque & Better Capital are the only current ones that come to my mind),

    ➡️ Utsav has personally built a pretty impressive portfolio including companies like Jupiter, Park+, BharatPe & Innov8 so it doesn't come as a surprise that he is looking to further institutionalize these operations (and he gets to use AngelList India's Angel Fund product to manage it).

    ➡️ I think this might also serve as a bridging of the ecosystems with folks like Naval Ravikant & prominent SV founders being LPs in iSeed. This seem great for the Indian ecosystem, there's a new early stage fund that's actively investing in companies & might even help with bringing more American investors & funds to participate in the India story.

    2. https://bit.ly/36oy94n: What does Swiggy's cap table look like ➡️ So I saw this fun piece in Entrackr today breaking down Swiggy's cap table and wanted to write out a couple of thoughts around it as well. ➡️ As it stands, the 3 cofounders of Swiggy own around 10% of the company with Sriharsha Majety controlling 5.4%, Nandan Reddy 2.5% & Rahul Jaimini (who recently left to join Pesto) 2% ➡️ On the investor side of the equation, Naspers owns 40% of the company followed by Accel India (7.61%), SAIF Partners (6.86%) & Meiutuan (6.26%). It's also worth pointing out that some of the early investors have sold partial stakes to the newer larger funds for a sizable return.

    ➡️ SAIF, Accel, Norwest, RB Investments, Harmony Capital and Bessemer Venture Partners had collectively generated $222M in returns, while still holding significant positions in the company and probably plan to make more secondary sales.

    ➡️ The Indian venture ecosystem hasn't seen too many billion dollar exits (through the public market or acquisitions) so maybe secondary sales is how Indian VCs return their funds. It has certainly been more popular in recent times with companies like Paytm, BYJU’s, and most famously OYO facilitating secondary sales.

    Feedback & ❤️ always appreciated

    More tomorrow :) BONUS (Tweet of the day): https://twitter.com/WorkLifeVC/status/1263173259551371265