Dubai: India is proving an alluring destination, this time from an angel investor's perspective. Dubai-based entrepreneur Prashant Gulati is one of the three co-founders of The Hatch, an investment vehicle that would look to opportunities among India's start-ups based in tech and tech-related services.
One start-up has already been given funding and another will close shortly. Another eight businesses have been shortlisted.
But The Hatch's investment strategy is clear on one point: its exposure to any business will not go beyond $200,000 (Dh734,399). "In the current Indian context, angel investors were tending to go with the big-ticket funding commitments of $1 million and more," Gulati said. "A valuation bubble was thus being created — when commitments are $1 million and over, that invariably happens — at one end of the start-up spectrum.
Fledgling attempts
"This, in turn, led to a funding vacuum of sorts for start-ups who either do not figure on the big angel investors' radar or are not of sufficient scale to interest them at this stage.
"But there are any number of start-ups out there that, ideally, could go on to generate higher value if given the right funding support at the right time. This is where we come in."
There have been other fledgling attempts in recent times by UAE-based individuals and businesses to create a funding stream targeted at the Indian small business space. Apart from the actual funding, such initiatives also wanted to offer mentoring programmes for Indian start-ups and businesses in their formative years to try and create opportunities within the Gulf.
But so far nothing seems to have come out of those efforts. Raising the required funding levels in what has since become a highly sensitive marketplace was one of the reasons, according to one of the partners in the proposed initiative.
But that is not a concern The Hatch would come up against. Gulati said the initial funding requirements are all in place. And with two deals having come out of its pipeline so early into the formation, it now has a track record to call on.
But would the promoters look beyond tech-related businesses? "Our emphasis on tech does not mean pure-play IT," Gulati said. "Our investment scope would cover companies that are in the cognitive sciences and any domain that has tech advances as its core philosophy."
Once the India operations reach certain maturity, the promoters would turn their attention to the Gulf and, much further afield, Silicon Valley. The other two co-founders, Anupama Arya and Puneet Vatsayan, have had extensive operational roles in Silicon Valley before returning to India.
Roadmap
The Hatch aims to incubate 1,000 entrepreneurs over the next five years in India. The promoters also plan to create campus-like facilities in six cities.
On the overseas side of things, the company plans to open centres in Silicon Valley, Dubai and Singapore. Each facility would have an area of 15,000-20,000 square feet, fitting in 15 to 20 start-ups.
