India's red-hot start-up space is seeing rising interest from venture capital investors. With an increase in start-up activities and more number of women taking a plunge into entrepreneurship, for the first time, a few business veterans have teamed together to launch a venture capital fund exclusively for women entrepreneurs.
Saha Fund, India's first Securities and Exchange Board of India-approved venture capital fund focused on women entrepreneurs, would have a corpus of Rs 100 crore. It would invest in companies run by women entrepreneurs as founders or senior management. The fund would also invest in companies where women account for more than half the employee base, Ankita Vashistha, founder and chief executive officer of Saha Fund, told Business Standard. Firms that create services and products focusing on women and children would also be under Saha Fund's radar, Vashistha added.
"Women are crucial to economic growth around the world but they need significant help in getting access to capital, getting support, entrepreneurial education and guidance especially in the start-up phase," said Vashistha, who has a decade of experience in the private equity and venture capital space at leading companies such as Aureos Capital (now Abraaj Group), Tholons Consulting and Tholons Capital. "We want to invest in the best women talents demonstrating leadership in the country and globally."
Some of the industry veterans who have invested in the fund as limited partners include former Infosys veteran T V Mohandas Pai who is now heading Manipal Global Education; Kiran Mazumdar-Shaw, chairman and managing director of Biocon; and Avinash Vashistha, past chairman and managing director of Accenture in India, also the chairman emeritus of Tholons, an outsourcing advisory firm.
"As a woman entrepreneur, I can deeply empathise with Saha Fund and what it aims to do - to catalyse women-led start-ups to build sustainable businesses with scale and skills. Women in general find it hard to access capital and I believe the Saha Fund will enable this process by providing a vibrant and interactive platform for women-led businesses to share ways of overcoming challenges, manage risk and deliver growth," said Mazumdar-Shaw, who has been championing the participation of more women in entrepreneurial activities.
"I am excited to be part of this journey," said Pai, who has also invested in few other funds including Exfinity Ventures and Aarin Capital Partners. "As a fund on a mission, Saha will contribute towards the acceleration of participation and success of more women entrepreneurs in India. With their operational expertise and deep grounding, the Saha team will empathise with the entrepreneurs and their growth stories to focus on building founding teams that lead by example," he added.
Saha Fund has already announced three investments including Kaaryah, a fashion portal offering western and non-casual wear for Indian women providing the best possible fit with its 18 sizes. The company, started in September 2013 by former Honeywell strategy head Nidhi Agarwal, has also received investment from Tata Sons chairman emeritus Ratan Tata.
The other two investments include Fitternity, a Mumbai-based fitness discovery and marketplace platform founded by Neha Motwani, and Stelae Technologies, a cloud-based content conversion software solutions provider founded by Aruna Schwarz.
Saha Fund, however, did not disclose the quantum of money it has invested into these companies though Ankita Vashistha said typically the fund would invest anywhere between Rs 1.5 crore and Rs 6 crore.
"The top challenges women leaders face in their career are the lack of flexible options for work, lack of confidence, and that women aren't given a chance because of the 'old boys' networks. Women entrepreneurs face hurdles in finding mentors, get less funding and face perceptual gender bias. Saha Fund is emerging as the first platform and fund where women entrepreneurs can create, innovate, develop and scale their leadership dreams," said Avinash Vashistha.
According to Nasscom, there were around 3,100 start-ups in India in 2014, a number which is fast increasing with an addition of 800 newer ones every year. However, including companies focusing on traditional sectors such as health care and education, this number is estimated to have crossed 6,000 at present. Even though the number of start-ups founded by women entrepreneurs is unevenly lower at this point, the early success of some of the women-run (or co-founded) companies such as Zivame, Nykaa, Sheroes and CashKaro has ignited participation of more women in the new-age technology ventures.
"Getting access to funding and mentors is a real challenge in the Silicon Valley, which has a matured start-up ecosystem. Even there, less than three per cent of venture funded start-ups have women CEOs. In that sense, Saha Fund would be able to fill the gap that exists in India as a 'for profit venture fund focusing on women entrepreneurs'," said Sanat Rao, who heads the M&A Connect Program at iSpirt. At present, India does not have a venture capital fund that exclusively invests in ventures started by women entrepreneurs, though there are some social impact funds. For example, Sankhya Women Impact Fund, an early-stage fund, focuses on economically-disadvantaged women.
SAHA FUND AT A GLANCE
India's first VC fund focused on women entrepreneurship
Fund to invest in companies run by women founders; firms with majority women employees
Fund will also invest in companies that are creating services or products for women and children
Has already committed three investments, including Ratan Tata-backed women's fashion wear platform Kaaryah
- Rs 100-cr fund gets investment from Kiran Mazumdar-Shaw, Pai, Avinash Vashistha