World Bank’s arm IFC is planning an aggressive foray into startups at Series-A level, as part of its recent push towards early-stage investing in India.
Till now, it has backed more mature startups like Byju’s, Lenskart, Bigbasket and Blackbuck, with ticket sizes upwards of $5 million at Series-B stage and onwards.
The IFC has, of late, been bullish on expanding its venture capital portfolio, with its venture investment portfolio standing at around $500 million till mid last year.
Over the past five-to-six years, the entity has made investments to the tune of $700 million both in direct venture investments and in venture capital funds across 15 countries.
“We are actively scouting for co-investment deals along with other early-stage focused venture funds in verticals such as consumer internet, health tech, edutech and fintech. We are also eyeing emerging tech areas such as AI and machine learning.However, we are going slow since these are rapidly evolving across the world,” said Ruchira Shukla, Regional Lead for Venture Capital and Private equity, South Asia.
“The cutting edge IP led work that is coming up in AI (artificial intelligence) and machine learning, which has applicability across healthcare, finance and fintech, is what is exciting us,” said Shukla who denied putting a number to how many early-stage deals the entity will be doing this year.
Also, part of its early-stage strategy is to invest in Indian early-stage focussed venture funds and accelerators, where it is set to close its first India investment, which will be announced in a couple of weeks. Globally, IFC has allocated $30 million towards its Startup Catalyst program as a sub programme of IFC’s Venture Capital Group.
As part of the programme, IFC will invest between $1-3 million in early-stage focused venture funds and accelerators and has already invested $4 million in two fintech-focused entities – Argentine Accelerator NXTP Labs and Flat6Labs of Egypt.
“Given the pace of developments we are seeing here, India will get a fair share of this corpus and our goal is to increase the envelope size to about $100 million,” said Shukla who has undertaken a holistic mapping of all incubators and accelerators in India and has had an internal discussion on who to focus on.
As per policy, the investment in funds will be agnostic towards investing in AIF category venture funds or in accelerators or incubators as long as it is a vehicle that invests in early stage startups at the seed or pre-Series A stage. Also the guiding criteria for IFC among other factors will be track record of the fund’s team, ability to raise capital and ensuring deal slow.
Source: ET Tech
