Mohandas Pai aims for over Rs 71-bn investments in start-ups by 2020

Aims to bet heavily on domestic funds

T V Mohandas Pai, former member of the board of directors at Infosys Technologies and now a well-known investor, has set a rather steep goal. It is to have over a billion dollars (Rs 71 billion) worth of investments, both direct and indirect, in Indian start-ups by 2020.

Aarin Capital, a fund he co-founded with Manipal Group managing director Ranjan Pai (Mohandas Pai is also chairman of Manipal Global Education), has been investing in start-ups and other venture capital (VC) funds since 2012. In all, it has invested in 25 start-ups and 10 funds, amounting to $100 million (Rs 7.1 billion).

So far funded by the two Pais, Aarin Capital is now seeking outside investors, to set up another fund of $125-175 mn. “The idea is to increase the thrust of investments,” Mohandas Pai told Business Standard. “My dream is that between all these funds, we would have $1 bn in investments across 500 companies by 2020.” 

Aarin is a fund of funds, having invested in VC funds such as Exfinity Ventures, Singular Ventures and Idea Fund, among others. It’s also a major investor in 3one4 Capital, a fund managed by Mohandas' sons, Pranav Pai and Siddarth Pai. As an active early-stage fund, 3one4 has invested in Tracxn Labs, Yourstory Media, and ToneTag. Aarin Capital, independently, has backed Byju’s, FabHotels and PharmEasy, among others.

“In each of these funds, we have put in 15-20 per cent (of the total fund size). We are GPs (General Partners) and LPs (Limited Partners) in 10 funds. The cumulative investment of all these funds is around $450 mn, and expected to touch $650 mn, when fully invested. Once the new fund, we are raising, gets closed, we would invest around $800 mn by 2020,” he said.

Mohandas Pai says the start-up sector in India does not get enough support from the domestic investors. "We, as an industry, have not invested enough money here. Take Flipkart and even Paytm, for example. I think, there, we have lost the plot. Of the $100-plus billion value created, only about $10 billion is Indian capital,” he said.

After leaving Infosys in 2011, Pai has been a mentor and board member to several companies, and on some government committees. He also is on the board at the National Stock Exchange and advises the government on its Rs 100-bn start-up fund of funds.

Pai has also made several investments through his family office. “As a family, we have investment in 32 funds (including 10 though Aarin Capital). Personally, we have made investments in 32 funds because we have to seed these. We have to build the ecosystem.” 

He is, he says, trying to bridge the gap between founders and capital. In this regard, he works with state bodies in the UK (India-UK TECH Rocketship collective), Japan and Singapore (fintech board at the Singapore government).

Aarin capital-based VC funds
 

• Exfinity Venture Partners
• 3one4 Capital
• Ideaspring Capital
• StartupXseed Ventures
• Singular Capital
• Neev Fund
• Saha Fund
• Unitus Seed Fund
• Tandum Capital (US)