Indian Angel Network takes international route for better returns

Indian Angel Network channelled 20% of its funding into companies abroad (mostly US and UK-based firms) in the past two years

At a time when entrepreneurship is fast picking up in the country, as is evident from the growing start-up space that is increasingly luring global investors, Indian angel investors are expanding their horizon and stepping into uncharted territories in search of better returns.
 
Indian Angel Network (IAN), Asia’s largest network of investors that put money in early-stage businesses, channelled 20 per cent of its funding into companies abroad (mostly US and UK-based firms) in the past two years. It recently invested an undisclosed amount in Los Angeles-based technology start-up Vyng.Indian investors looking beyond on shores for better business is not new but experts believe that this is gaining ground. Easier availability of information through the network has prompted angel investors to vie for newer profit avenues.
 
According to Saurabh Srivastava, Chairman and Co-Founder, IAN, foreign investments typically help hedge risks on returns. “If you make one investment, the chances of success are low. One way of mitigating risk is to do a number of these across several sectors and in different countries,” he said.
 
Apart from funds, global technology start-ups are connecting with angel investors for advice to understand the needs of different markets, Srivastava added.
 
Another angel investor, Sanjay Mehta, said the Liberalised Remittance Scheme had made it easier for them to spread wing in foreign lands. The window, opened by the Reserve Bank of India in 2004, allowed individuals to invest up to $150,000 in assets. In 2015, then RBI governor Raghuram Rajan had raised the limit to $250,000.
 

Of the investments Mehta made last year, around 30 per cent was abroad. “These are mostly start-ups with a strong India connect, such as Amigobulls, Avaz, and Hemex Health,” he said. Documentation and maintaining legal compliance are much easier abroad.
 
 Earlier, IAN member Alok Mittal, said earlier foreign angel opportunities weren’t easy to get in India, through strong angel networks, the information has started flowing in. “The inbound visibility of foreign investment opportunities have gone up and, apparently in tandem, the outbound nature of Indian entrepreneurs to start companies abroad has grown stronger,” he said.
 
Mittal diverted 10 per cent of his total investments to Singapore and US-based companies last year.