Mittal Jr ups his reputation as VC investor as firm invests $500 mn so far

In the last one month, Shravin Mittal has invested in follow-up funding rounds in six portfolio companies where he has already made bets as a venture capital investor. This includes used-car online marketplace Cars24, which has just raised $200 million for a round E funding, catapulting it into India’s unicorn club. Mittal’s VC company was the lead investor when the platform raised around $100 million in the previous round.

Moreover, it has just inked a deal with the 18th company in its portfolio, Berlin-based VAHA that makes smart mirrors for workouts

Mittal, who is an MBA from Harvard and is London-based, recently came into the limelight when telecom czar Sunil Mittal announced that his son, who is also the managing director of Bharti Global (part of Bharti Enterprises), had played a key role in closing the OneWeb deal. Bharti Global is putting in $500 million with the UK government (which will put in a similar amount) in the once bankrupt satellite company to offer broadband services across the globe.

But what is less known is that Shravin Mittal is also the founder of Unbound Advisors, a venture capital company funded by the Mittal family that he runs independently, and which has been quietly investing in start-ups across the globe. The VC company straddles various sectors and geographies, and has invested in e-commerce delivery start-up, Paack, in Spain, Singapore-based Syfe, a robo advisor on financial investment, and Forto, a digital freight forwarder in Berlin, amongst others.

Mittal Junior will not divulge how much the company has invested so far, but he admits that the investments range from $10 million, which is the minimum threshold, to $50 million. If aggregated, that comes to a cool $500 million-plus.

Unbound Advisors has been the lead investor in the last seven deals that it has been involved in. Its co-investors include Softbank, DST Global, Valar Ventures, Inven Capital and NEA, amongst others. And Mittal, who used to work with SoftBank Vision Fund, says that while the company currently takes only “significant minority positions”, it could invest majority stakes as it grows the corpus.

“We look at businesses which are transformational. And we generally start from series B funding and go all the way to pre–IPO. Currently, we have chosen five thematic areas for investment — financial services, cybersecurity, enterprise software, logistics and health and wellness,” says Mittal.

However, the investment model of Unbound Advisors is very different from a PE fund, which has a limited time frame to make returns. Hence, there is always pressure to sell and raise money and go to the market to raise money for the next fund. Instead, Unbound invests through the holding company and not by floating a PE fund.

While currently most of the money to invest comes from the Mittal family, Shravin Mittal says that he has commitments from other investors who will join as shareholders in the company. “This helps us to make long-term investments in a company. We have no problem in staying invested for 10 to 12 years or more. In some cases we will not even exit. If the investment does well, the NAV of our shares do well too, so we are aligned to the portfolio companies’ performance.”

This is reflected in the fact that they have not exited from the two companies that have gone for an IPO.

The second advantage of the holding company structure is that unlike PE funds, Unbound does not charge a 2 per cent management fee from the invested company.

Unbound also plays a key management role in companies where it is the largest shareholder investor. It usually has two board members and all key decisions on hiring and firing as well as the budgets have to be cleared by them.

So how is Unbound’s investment strategy different from that of Bharti Global? Shravin Mittal, who straddles both the companies, says that Bharti Global invests in companies where the Group wants to operate the business. For example, it has taken a controlling position in One Web. Unbound, on the other hand, is an independent business run by him and his team. “Both believe in building businesses, only the stages of entry are different,” says Mittal Junior.