Open to any sector legal in India: Green House Ventures explains its funding philosophy

What do you do and whom do you turn to when your start-up is unable to take off primarily because your efforts to raise money hasn’t paid off? Vikram Upadhyaya_, entrepreneur and angel investor, last month launched Green House Ventures (GHV), an accelerator to fund and mentor start-ups stuck between post incubation andraising their first VC money. He says a lot of start-ups who also have their product ready and active customers are unable to raise further money as VCs usually say come when the company is doing better._

Upadhyaya has invested in start-ups such as Druva, MeriNews, Viedea, etc. GHV will invest up to $100,000 each in 10 start-ups in a year, against 20 percent equity, he said. GHV is now a partner with World Innovation Lab, a global fund that invests in technology start-ups in the US and Japanese. “They have asked us to get these start-ups to Japan, do a demo and then they will invest in them,” informs Upadhyaya, Founder, Green House Ventures. GHV has received more than 600 applications until now and the final decision will be made at the end of this financial year.

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Sector agnostic Upadhyaya talked to Firstbiz about GHV, its offerings and the state of the Indian start-up ecosystem. Edited excerpts:

What purpose or gap are you fulfilling through your new accelerator?

Around seven years ago when a number of NRIs returned to India, they brought along the Silicon Valley culture and entrepreneurship. A lot of them became angels, entrepreneurs, mentors and many joined hands with global VC firms and brought them to India.

However, a lot of focus was given to the starting up of a company and it was populated big time, and rightly so, because that was the first time we were doing it. It grew much bigger than the industry expected. A lot of easy money started pouring in as seed money. But, how many of those ideas which got converted into prototypes received Series A funding? Not many. The conversion rate is very slow and the gap between post incubation and Series A investment is getting bigger somehow. We are focusing on start-ups that need not be profitable, but at least have their product ready, a team in place and a few customers who are ready to pay for the product or service.

What are the sectors that you are looking at?

Anything which is by law allowed in this country- we will be interested to give it a thought. But we do emphasize on the execution capabilities of an idea and its innovation. One should be strong in execution not only from the conventional point of view, but it should be done in an innovative manner, too. Moreover, it should be scalable and use technology to propagate the business. In a country like India, if one has to scale quickly, we think that the use of technology is a must. By technology we mean something like self-created algorithm, patented ideas or products and not just building a website or an app. If all this is in place, I am game for it, irrespective of any sector.

What is the quality of pitches you have received? How many companies will you be taking in the first batch?

I will not say that the pitches we have got are exceptional, but at least people are coming up with something that we never thought of. Healthcare, education, product companies, logistics and sports are the sectors we are exploring right now according to the applications we have got.

We have decided to take 10 companies in a year and 25 in 2.5 years. We will invest up to $100,000 per start-up against 20 percent of equity. There were a lot of mixed reactions from people that 20 percent is too high. I say it’s a relative statement.

Is the Indian startup ecosystem moving fast enough to catch up with other global ecosystems?

Let’s take one step back and try to analyse how many Indian start-ups are addressing the real pain point of our country? I can’t count more than five to six companies. Those who have grown very big with billion dollar valuations do not solve any pain point of our country. Yes, e-commerce is required and indirectly it does help us, but we need ideas to solve larger problems, such as healthcare, finance, etc.

We should be clear that the ecosystem in here should not be a replica of western or eastern model. We need a local approach to all the ideas that we bring to India. So whether it’s the eco system or business model that we are replicating in India, we should look at the local needs first. We are missing on this and that’s why we are not able to outperform other ecosystems.