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LV’s 2019 Review :: Connecting A Billion Dots

2019 proved to be one of the most active years for LetsVenture with the LV portfolio of 195 startups being valued at $1.07 billion (as of November 2019). Having our portfolio hit a billion dollars is a true validation of value being created for our investors, while building the most trustworthy, founder first and compliant platform for early stage fundraising. The last decade was about developing the nascent ecosystem in India, with a focus on building strong fundamentals and growing organically. We believe, with strong leadership team coming on board, the next year will be about truly leveraging all our learning from the last few years to scale the platform, and becoming globally relevant. 

Top 5 trends that emerged on the platform 

  • Increasing investor interest from global Indians & investors from the ‘rest of India’

    LV added 1,523 investors this year (a 23% growth over 2018) with global investors constituting close to 28% of the new additions. India’s startup story is finally emerging stronger in the early stage space with increasing investments from angels outside India. ‘Rest of India’ (outside Bangalore, Delhi-NCR and Mumbai) saw 21% investors join in. The increasing awareness towards the startup asset class, along with increasing awareness towards the mechanics of investing has been key towards this trend

  • Cheque sizes have doubled with the average round sizes at $750,000 on LetsVenture

    2019 has seen a significant shift in angel investing behaviour with the average commitments doubling from $11,000 to $21,000. Angel rounds are now averaging at close to $750,000 – a marked increase from an average of $200,000 in the early years of LetsVenture. We attribute this to the change in entrepreneur profiles (more seasoned professionals starting up or second time founders) as well as the stage at which they are raising angel rounds. Many entrepreneurs are choosing to invest their own capital and raise smaller ‘family and friends round’ before they raise formal, institutionalized angel capital.

  • Syndicates have become mainstream

    With angel round sizes increasing, the Syndicate model in India has now become mainstream. LetsVenture has 22 syndicates on the platform with 12 launched this year. Syndicate leads are second generation family businesses, very successful entrepreneurs and marquee angel investors with remarkable exits. The Syndicates serve two purposes, on the one hand they are a launchpad for new “marquee” investors who’ve cut their teeth with scores of angel investments and arrived as a strong thesis and approach; and on the other hand these Syndicates provide informed access to the asset class for new investors who are still finding their feet. We believe this trend is addressing the gap in the ecosystem of the lack of investors. Some of LetsVenture’s Syndicates are led by Anupam Mittal, Pallav Pandey, Vivek Khare, Mohit Satyanand, SenseAI, India Quotient

  • Ease of investing in startups has improved

    The ease of organising investments has been significantly impacted by SEBI’s Angel AIF. LetsVenture being a registered SEBI AIF saw more than one investor joining per day taking the accredited investor sign-ups to 470 with a committed AUM of $19 million so far. The Angel AIF allows founders to have a single cap-table entry and founders and investors are increasingly using this vehicle to structure their investments in startups

  • The Platform has seen the flywheel complete, with defined exits

    Since 2013, LV has facilitated over $100 million in investments into 195 startups. LV’s portfolio of startups have raised follow on funding of over $150 million. In 2019, 34 of LetsVenture’s startups raised follow-on rounds. Some notables here:

    • Sugar Cosmetics, FleetX, Yulu, Khatabook, Medtrail, Sattviko, Trell, Original4Sure, MCaffeine, ClassPlus, myHQ, Meddo, Henry & Smith, Niki, Little Black Book, Purple Style Labs
    • Bajaj Auto led a strategic round in Yulu
    • Notable VCs who participated in portfolio uprounds: Tencent, GGV Capital, Sequoia, SAIF, 3one4 Capital, Strive VC, Sri Capital, GrowX, A91, Venture Highway
    • Multiples on this year’s up-rounds are in the range of 1.5x to 22x 
    • Some previous years’ up-rounds have shown an upside of upto 74.3x

Since 2013, LV have seen 14 acquisitions & there were three notable ones in 2019: 

    • Innov8 – Acquired by OYO
    • MockBank – Acquired by Embibe (an RIL co)
    • Pixtory – Acquired by YourStory

In terms of a sector wise split in deals:
LV saw maximum deals done in Healthcare, F&B, AI, Education, Retail; followed by Fintech, Enterprise Software and Hardware 

Significant new initiatives from LV in 2019

#LetsTalkESOP & Beta Launch of MyStartupEquity

With exit conversations becoming more prevalent in the ecosystem, the equity value of startups and the related ownership of this equity with employees has been a much focused discussion in the ecosystem. LetsVenture took a leadership role with its #LetsTalkESOP campaign, endorsed by founders and investors like Alok Bansal of PolicyBazaar, Pankaj Chaddah of Zomato, Abhiraj Bhal of Urban Clap, Subrata Mitra of Accel & Mohandas Pai. 

There is a gap in the understanding of the value creation of this asset class among employees. LetsVenture believes this would be the beginning of the new class of wealth created for millennials and Gen Z, working for startups in India. This wealth creation converts employees into future entrepreneurs as it gives them greater appetite to take risk. The Paypal Mafia is just one example of how wealth creation from one success led to so many others. 

In conjunction with #LetsTalkESOP we launched MyStartupEquity, a tool to manage ESOPs. Presently in an invite only beta, the platform enables companies to seamlessly manage ESOPs across the lifecycle from granting, exercising and ultimately liquidating the ESOPs. 

Former Flipkart Senior Director of HR, Satheesh KV joined as an Advisory Board Member and Chief Evangelist for this new business unit.  

LV invests into capacity building for accelerators with LetsAccelerate

Every year LV evaluates thousands of startups and showcases hundreds of startups to investors. This has given LetsVenture a vantage perspective on what investors are looking for. The platform is now leveraging these insights into LetsAccelerate to help accelerators and incubators make their startups investment ready for angel and early stage investors. 

As a first step in this direction, on November 12, 2019 – NITI Aayog CEO, Mr. Amitabh Kant launched LetsAccelerate’s EV Innovation Labs – a comprehensive platform to identify, nurture and fund high-potential startups in the electric vehicle space via deep-engaged mentoring, access to capital and access to industry. 

LetsAccelerate is being helmed by former IAN VP and co-founder of Applyifi, Prajakt Raut.

Exclusive access to Silicon Valley based Pioneer Fund

As a commitment to providing access to high fidelity opportunities to family offices in India, the LV Titans platform partners with some of the most sought-after global VC funds. Silicon Valley based Pioneer Fund, which pools capital and expertise from 185+ Y Combinator alumni to invest in YC startups, is one of them. Y Combinator as you may know is one of the world’s most successful accelerator programmes & has been home to Airbnb, Stripe, Dropbox and others. Quite a few LV Titans joined Pioneer as LPs in 2018. Then they followed up as investors in the ‘Future of India’ SPV earlier this year.

In 2 years this fund has quickly built a portfolio of top YC companies, 10% of Pioneer’s portfolio has already raised their Series A and the fund’s unique access has allowed Pioneer to co-invest in these rounds alongside top VC firms like Andreesen Horowitz, Accel, Khosla Ventures, Sequoia, First Round & GGV Capital. The fund also has a focus on India, having recently launched a dedicated SPV focused on top YC Indian companies (investments include Digi-Prex, Green Tiger, andVahan).

LV Intelligence Labs & LV PitchBook

Data is gold and content is king in the 21st century. And we are now actively using both to power our investors and startups with insights and analysis that go beyond the obvious. The aim is to create a cross section of content that serves various levels of the user pyramid with actionable insights that are India specific and leverages the power of the LV network of founders and investors. We’ve already launched two deep dive reports that we are calling LV PitchBooks on AI and EVs and you’ll see more from this space in 2020. Former CNBC-TV18 Features Editor, Syna Dehnugara is heading this up.

 

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