Aarin Capital, which has Infosys co-founder TV Mohandas Pai and billionaire promoter of Manipal Education & Medical Group Ranjan Pai (unrelated to each other) as its limited partners (LPs), has invested in over 35 companies and eight VC funds. The fund, formally launched in January 2012, has deployed 45% of its $150 million corpus across the startup ecosystem. In an interview with Techcircle.in, Deepak Natraj, managing director of Aarin Capital, speaks about the fund's investment strategy, the sectors it is interested in, and its exit pipeline. Edited excerpts:
How many startups has Aarin Capital directly funded till now? What is your target for this financial year? We have invested in over 35 companies. We don't have a particular number as such to invest in. We invest whenever it fits with our philosophy. I don't have a deployment pressure. We basically look for good teams in good spaces, and we definitely go with the view that we should get a good exit.
What is Aarin Capital's sweet spot for investment? Our sweet spot is $1-3 million. We typically invest $100,000 during the angel round. We did a lot of angel investments last year as we liked the space and it was more of an active reaction to the market. We come in till the Series A level. We also do a follow-up round to indicate to the future investors that we are confident about the team and the business.
There have been instances of startups shutting shop in the past months. How does Aarin Capital ensure that it selects the right startups for investment? Startups are meant to fail as much as they are meant to succeed. There is intellectual capital, execution capital and financial capital. All three come together to make up a startup. In many ways, these are experiments. Sometimes things work out, sometimes they do not. The reality is that regardless of how much money you collect, you have to spend it frugally and you can't burn your way out of trouble.
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