In what seems to be a slow but steady change in the investment tide for the start-up ecosystem, a slew of early-stage funds have been launched since the start of this year. The latest to join the club of new early-stage venture capital funds is private accelerator Zone Start-ups India.

The Zone Startups India Fund has a corpus of Rs 190 crore and has been backed by Toronto-based Ryerson Futures, the technology accelerator and investment arm of Ryerson University and the Chokhani Family office.

“We are looking at raising the remaining capital largely from Indian institutional accounts. We expect to make the first close in the next two to three months, and by the end of the year, the entire fund should be ready,“ said Ajay Ramasubramaniam, Director of Zone Startups India.

The category Alternative Investment Fund is looking to build a portfolio of 8-15 companies over the next 12 months. While the fund will conduct deals with ticket sizes ranging from Rs 50 lakh to Rs 3 crore, the sectoral preference will remain core technology.

“We will largely train our focus on software companies with an eye on mobile technology and enterprise tech,“ said Ramasubramaniam. “B2B is the bigger focus but we would also look at good B2C companies with a proven track record and (those that) have already raised one round of funding.“

Reversing 2016’s early trend, the first quarter of 2017 saw angel and seed investments fall both in volume and value terms with deal volumes reduced to half as per data from VCCEdge. January-March 2017 alone saw 120 deals, compared with 245 in the same period last year with Series-A funding slumping 65% in deal value on a YoY basis. Experts and investors believe that the tide is set to turn as the exit scenario in India’s unicorns brings back investors’ lost faith in the startup ecosystem.

Beyond its micro venture capital fund, Zone Startups India has also received a grant of Rs 10 crore from the government’s Department of Science and Technology to invest in 10-15 companies that are part of its accelerator programme over the next year. “The grant would be used for very early-stage companies that are part of our accelerator, so the ticket sizes would span from Rs 30 lakh to Rs 1 crore,“ said Ramasubramaniam.

The Ministry’s grant is the first such move made by the government for a private accelerator in India. As a revolving, or green fund, this smaller Rs 10 crore corpus will be invested on a recycle-and-use basis through its 2-5 year life span. Companies can tap into this corpus either for equity or debt depending on their use case.

Source: Economic Times