Headquartered in the San Francisco Bay Area in the US, Globevestor is an equity crowdfunding platform which was launched in March last year to invest in emerging markets. However, in 2015, the firm wants to back businesses that primarily serve Indian consumers, enterprises or governments, or are built by teams in India for global consumers. The platform is backed by Silicon Valley-based Boost VC, Bill Draper and Tim Draper among several investors. It has already invested in online educative toy development firm Flinto, gaming startup MadRat and self-drive rental service Zoomcar. Techcircle.in spoke to Ankur Shrivastava, co-founder, Globevestor, to know more about the fund, its investment philosophy, opportunities in the market and more. Here are the edited excerpts:
How does Globevestor compare with other angel investor groups in the country?
Globevestor is the first cross-border online VC platform focused on investing in India that combines the best characteristics of traditional VC funds, angel groups and online marketplaces. Most of the part of the investment process including selection of startups, due-diligence and management of the investments till exit happens online. We take care of all the legal and regulatory stuff in the backend so that investors can focus on what they do best -- writing checks and helping portfolio companies grow. In addition, we keep investment minimums for investors very low (about $2000), which enables them to build a truly diversified portfolio with small total investments.
Startups convince us, and we take care of the rest - no pitches to multiple angels, no phone calls. They get a single entity on their cap table and for all future interactions till exit. In addition, we are building the network and support infrastructure for our portfolio founders to benefit from.
We make money, like a typical VC, by charging a carried interest when the investments succeed.
What is your investment philosophy? How many companies will you back in 2015? What's the average ticket size?
We look for passionate innovative entrepreneurs solving interesting local problems. For instance, MadRat Games, which is creating games in Indian languages. We aim to back about 10-12 startups in 2015. The average investment we intend to make in each startup is about $100,000-250,000, as part of bigger rounds.
Who are the investors?
We have over 200 global accredited investors -- successful entrepreneurs, angels, big tech employees and top management investors from finance, consulting and general management roles -- investing in Indian startups.
Which verticals/sub-verticals are you looking at?
Currently, our investments are sector agnostic—of course complying with existing FDI rules. We've invested in sharing economy, edutainment and gaming till now, and have seriously evaluated startups across logistics, solar, enterprise SaaS and consumer tech.
Do you also look at concept stage startups?
Though that is part of our eventual aim, we aren't looking to fund idea-stage startups yet.
Will you look at co-investment with other VCs?
Absolutely; early stage investing is a lot about collaboration with other like-minded angel or VC investors. In fact, all three of our investments have been co-investments with other well-known investors. This is also a great opportunity that Globevestor brings to investors - to be able to invest in the same round and same terms as say, Tim Draper, Sachin and Binny Bansal, Larry Summers or Lady Barbara Judge. What are the key things that you look for in a company before showcasing it as an investment opportunity to the investors on your platform?
We look for strong teams that are attacking interesting problems that many customers want solved. Since we invest early stage, we also want the founders to have the passion and determination to keep at it even if their initial solutions fail. At this point, we'd also like some initial traction or proof of concept.
How do you read the current trends in the Indian startup ecosystem?
The support for Indian entrepreneurs is growing rapidly - the accelerator/incubation ecosystem is maturing, we have pocket-friendly co-working spaces, investment climate is hot, and the government's talking about increasing the ease of doing business.
Exits have slowly started happening since the redBus acquisition and we're looking at a few IPOs over the next couple of years. This would lead to creation of a big pool of angel investors from amongst the crop of current tech founders, which will boost the early stage environment.
Indian startups have also grown in confidence to compete with tech companies from the west. Apart from defending domestic turf against global giants, some are taking incumbents in developed markets on in their own territory. This will build enough product competence and confidence in India to start building for the world and for the world to take them seriously.
How do you compare the Indian startup ecosystem with that of Silicon Valley?
Industry statistics say that currently US gets more than two-thirds of global VC investment while India less than one-twentieth; so it's been considerably smaller. But the growth is here and India is starting to churn out huge tech success stories. Flipkart is now only second to Uber among the most valuable private companies in the world. More than 500 million people are expected to come online over the next three-four year on cheap smartphones in India. That's a huge opportunity for entrepreneurs and investors.
However, there's still considerable inefficiency in the funding ecosystem compared with Silicon Valley that can be addressed by different stakeholders. In India, we hear a lot about non-standard term sheet clauses and very long decision times, especially from early stage investors, that make entrepreneurs' lives difficult. The government must ensure easy incorporation and closure of businesses, simplification of taxes, allowing foreign investment in key startup sectors like B2C e-commerce which will also make entrepreneurs keep their ventures incorporated in India.
Trends in most of these areas are looking up, though. We are extremely bullish on India and investing here for the long haul.
(Edited by Joby Puthuparampil Johnson)