Budget 2021: Impact on Investors and Startups

 

View this email in your browser We have been highlighting to the government and at various industry bodies and forums that the key fillip the government can give today for the startup ecosystem is to significantly improve the Ease of Doing business for our founders. This remains the single biggest hurdle in making India a truly global leader in giving birth to startups and helping hundreds of them to become unicorns in the next few years. This budget has addressed a few of those items long standing on the industry’s wishlist One Person Companies: This is a good move and a long standing ask from the startup ecosystem. This will enable single founders to incorporate companies without necessarily requiring more people either as shareholders or on the board.These one person companies will be able to retain their status without restriction on paid up capital and turnover. They will also be allowed to convert into any other type of company at any time. Restrictions on NRIs setting up OPCs have been eased and presence in India of 120 days in a year enough to set up an OPC. Details of the scheme to be scrutinized more carefully on the exact compliance burden.   Compliance requirements reduced for companies with revenue of up to 20 Crores or paid up capital of INR 2 crores: This revenue has been increased from the previous number of 5 crores. The other number that has been increased for reduced compliance is a paid up capital from 50 Lakhs to 2 crores. Both these will help increase the ease of doing business for companies in India.   Decriminalization of compliance in LLP entities is also a welcome step. This will help the smaller entities think through their business and financing models without worrying about criminal liabilities in case there is a gap in compliance.   Merging of SEBI Act, depository Act and a few other acts will have a long standing impact on the angel investing framework towards creating a robust and supportive regulatory framework.   Eligibility of Tax holiday has been extended to March 2022, for companies registered as startups with the government. This will impact only those startups which are profitable. Since most of the startups funded by the MA network are at the initial stage and are still burning cash, this provision may not be beneficial to our portfolio.   Extending Capital Gains tax exemption for Investors in startups to March 2022: While this scheme had been introduced last year and the time for it has been extended to one more year, the requirements for the exemption of reinvestment in a government recognised fund is not useful. More is needed on this front for this to be a true needle mover for investors.   Tax Audit: No tax audit required if gross sales are upto 10 crores and 95% sales and expenses are digital payments. Helpful for start ups with large volume of turnover with net losses

MA Portfolio company Knocksense raises next round of funding

 

MA Portfolio company Knocksense raises next round of funding

Lucknow-based Knocksense, a hyperlocal media house specializing in non-divisive news curation, co-founded by Vibhore Mayank and Varul Mayank, has raised $200K from We-Founders Circle and LetsVenture. Knocksense produces visually-appealing content on Indian cities, covering subjects that often escape the attention of mainstream media houses. In June 2020, they received a small funding from the Mumbai Angels Lifeline Investment Program (an interim product launched by Mumbai Angels during the Covid-19 pandemic to support the Indian startup ecosystem). This funding will support their efforts to scale up operations by expanding into more tier-II cities as well as launch video stories and content in Hindi.

Vibhore Mayank, Founder, Knocksense commented, "After raising the bridge round from Mumbai Angels Network a few months back, our discussions with other investors fast tracked and as a result we were able to close the current round in time. Post this round, as a content producer our focus will be on creating engaging content, which is a mix of local news, recommendations, videos, features, and more. When it comes to news, we are committed to producing only non-divisive stories, which does not breed negativity or create sensationalism. Tier-II cities with an active millennial audience will be our target."

Amitesh Pandey, lead investor says, "I invested in Knocksense in the seed round in 2018, since then I've seen the company grow more than 10 times both in terms of revenue and traction, after reinvesting via Mumbai Angles in the bridge round I am really glad to know that the model and the team we trusted are now backed by marquee investors and platforms such as Lets Venture, shows that Knocksense is solving the news crisis in India in the most innovative way possible. Upwards and onwards."

Nandini Mansinghka, Co-promoter & CEO, Mumbai Angels Network commented, "We’re delighted to see another MA backed portfolio company Knocksense which was a part of our lifeline program gain additional investment which will help them to scale up and expand their reach. We at Mumbai Angels see great potential in their unique brand of digital content”.

Hemp Horizons, a hemp seed processing company raises funds from Mumbai Angels Network

 

Hemp Horizons, a hemp seed processing company raises funds from Mumbai Angels Network Hemp Horizons is a GMP certified hemp seed processing company. It was founded by Rohit Shah, Kartikey Dadoo, and Kanishk Yadav in April 2017. Company contract manufactures hemp products and owns a brand called Health Horizons. Under its USFDA approved brand “Health Horizons'', the company sells top of the line hemp products. They manufactured their first machine which helps in making hemp products in India after eight months of extensive research. The company launched three products including the Sativa Hemp Nubs (Hemp Hearts), Sativa Hemp Powder, and Sativa Hemp Oil. Quickly its product range grew to ten, all made from hemp and in the personal care range. The company is launching:  Two new hemp seed based products in 45 days.   The company will use funds towards launching and marketing of Cannabis extracts, second gen hemp seed products. Rohit Shah, CEO of Hemp Horizon says, "A plant that can feed us, cloth us, provide us medicine and give us shelter on top of being carbon negative. What other miracles are we seeking!! We are happy to see more and more individuals understanding the benefits of this plant and investment funds looking at companies like ours as a potential game changer in the health and wellness space. Cannabis/Hemp can be a category in itself. In the next 5 years no industry will be left untouched by Cannabis/Hemp and its derivatives. 2021 is an exciting year for Cannabis/Hemp in India and the world". Nandini Mansinghka, Co-promoter & CEO, Mumbai Angels Network commented, "We believe Hemp Horizons to bring change in the way people see Hemp and its uses. We are excited to welcome Hemp Horizons to our portfolio and look forward to seeing them amaze everyone with their new products specially in the health and wellness space".

Portfolio Spotlight January 2020

 

Spacetech Startups like Dhruva Space geared to meet future demand In a recent announcement, the Indian government has opened up the space sector for private players and has also formed a dedicated unit - Indian National Space Promotion and Authorisation Centre. Dhruva Space has sought permissions for space-based applications, satellite making and development and launch of rockets. Read More

Unlu launches learning & entertainment platform: Unluclass Unlu makes it possible for everyone to learn from celebrity experts. The platform brings equality in non-academic learning, by blurring the boundaries of availability and reach of celeb mentors such as Johny Lever. Read More Logistics Company Trukky launches low cost cargo insurance Trukky has partnered with Bharti AXA as their Insurance Partner to offer user friendly and convenient insurance solutions for retails shippers. They can now buy single transit insurance on demand, at the lowest rates and with end to end support. Read More Migrate your sales team members from WhatsApp to ODIGO, a secure enterprise messaging platform With Privacy and confidentiality becoming a major concern for businesses now, Talent Bridge are offering Odigolive free for businesses/ teams with 100 users. 3 steps to unlimited possibilities with total privacy and confidentiality. 1. Download Odigolive now: 2. Enter the promocode: OD3R6M 3. Add 99 users from your team and use it for free Download Now Job Openings

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Exotel raises funds and provides an 18x exit to Mumbai Angels

 

Exotel raises funds and provides an 18x exit to Mumbai Angels

Bengaluru-based Exotel, Cloud telephony service provider, co-founded by Shivakumar Ganeshan, Ishwar Sridharan, Siddharth Ramesh, Vijay Sharma, has closed growth capital INR 40 crore funding round led by venture capital firm A91 Partners.  Founded in 2011, the startup had raised a seed round from Mumbai Angels in 2012, co-invested by Blume. This is their first fund raise after the seed round in 2012 and some of the early MA investors have exited in this round, realising over 40% IRR, ~18x multiple.  Exotel offers a number to a company on which they can receive and make calls and SMSes — all at the same time, without having to invest in any infrastructure. The product is a dashboard with sales tools, marketing tools, customer support tools, business intelligence, analytics etc.

Shivakumar Ganesan, Founder, Exotel said, “Mumbai Angels investors had supported us when we were building the platform. I am happy that I was able to deliver and provide a good exit to them. It is a matter of pride for us at Exotel that we have grown organically after the first fundraise from Mumbai Angels. Exotel has helped enterprises migrate to cloud-based customer communication and build personalized and timely customer engagement across customer support, marketing, operations and sales.”

Gautam Shewakramani, Investor Board Member at Exotel representing Mumbai Angels shareholders said "Since our investment in 2012 Exotel has shown remarkable growth in a sustainable and capital efficient manner. We are thrilled to have A91 partner with the company for its next stage of growth."

Nandini Mansinghka, Co-promoter & CEO, Mumbai Angels Network commented, "Exotel through its cloud technologies has helped more than 4000+ customers across Asia Pacific. It is very rewarding to see Exotel’s journey from seed round investment to a phenomenal 18x exit to our Investors and we acknowledge the effort of Shivku and his team. We are excited that Exotel is an MA Portfolio company and wish Shivku and the team continued success.”

MA Portfolio Gegadyne raises ~$5 Mn in Series A from V-Guard

MA Portfolio Gegadyne raises ~$5 Mn in Series A from V-Guard

Mumbai Angels (MA) Network backed energy startup Gegadyne which provides game changing energy-efficient and eco-friendly alternatives to conventional lithium-ion batteries, has received a strategic investment of approximately USD 5 million from electrical appliances giant V-Guard. Gegadyne was founded in 2015 by Jubin Varghese and Ameya Gadiwan and in 2017, they raised an angel round from Mumbai Angels Network.   The Mumbai-based startup has developed a technology which allows batteries to charge from 0 to 100% in around 15 minutes; unlike lithium ion batteries that charge at longer intervals. Their batteries are developed from supercapacitors having an energy density similar to that of lithium ion batteries. This innovative approach is a landmark development, as according to research data, the market for batteries is slated to grow globally at a CAGR of 15% over the next seven years.   This investment will enable Gegadyne to scale up its operations and further enhance research and development. Vishamitra Hariharan, Mumbai Angels Deal Lead Gegadyne, said, "We have great expectations from Gegadyne to become the leader in the world of sustainable technologies and look forward to the company playing a pivotal role in transforming EVs, as well as sustainable energy products as a whole. Gegadyne has onboarded the right investor in this journey of revolutionizing battery technology". Jubin Varghese and Ameya Gadiwan, Co-founders, Gegadyne commented "We are elated to have V-Guard Industries as an Investor  on our mission to build the next generation of Battery Technology that will revolutionize the field of Energy storage and catapult India to be self-reliant in advance battery chemistry. We also would like to acknowledge the tremendous faith demonstrated by our seed investors – Mumbai Angels Network in our capabilities & enabling us to get to where we are today".

Nandini Mansinghka, Co-promoter and CEO Mumbai Angels Network, commented, "Worldover, there is a steady rise in the demand for energy-efficient solutions like the one Gegadyne provides. It's great to see how products like these are helping us move towards a sustainable lifestyle with the same level of convenience. We are thrilled to see that our portfolio company is now raising additional funds in their Series A Round, validating our faith in them".

MA Portfolio Company Exotel raises INR 40 Cr from A91 Partners

 

MA Portfolio Company Exotel raises INR 40 Cr from A91 Partners

Mumbai Angels Network’s portfolio company Exotel Techcom Pvt Ltd has raised fresh funding from venture capital firm A91 Partners. The Company was launched in 2011 by Shivakumar Ganesan, who teamed up with Ishwar Sridharan, Siddharth Ramesh and Vijay Sharma to start the venture. In early 2012, it raised seed funding from Mumbai Angels and Blume Ventures. Exotel plans to use these funds to capitalise on the enterprise digital adoption wave in the aftermath of the pandemic and invest in new-age technologies to power chatbots, voice translation services, caller sentiment analysis, automatic call quality assessment and more. In addition, the Company plans to deploy the funds raised to accelerate the product development and enter new markets overseas. In particular, they are looking at the growing revenue contribution from markets such as Southeast Asia to plot its expansion in the coming years.

Shivakumar Ganesan, Founder, Exotel said, “The pandemic has changed the way companies conduct business. People are now increasingly moving away from an office setup. This has made digital transformation and migration to the cloud a priority.  Exotel has helped enterprises migrate to cloud-based customer communication and build personalized and timely customer engagement across customer support, marketing, operations and sales.”

Gautam Shewakramani, Investor Board Member at Exotel representing Mumbai Angels shareholders said "Since our investment in 2012 Exotel has shown remarkable growth in a sustainable and capital efficient manner. We are thrilled to have A91 partner with the company for its next stage of growth."

Nandini Mansinghka, Co-promoter & CEO, Mumbai Angels Network commented, "Exotel through its cloud technologies has helped more than 4000+ customers across Asia Pacific. It is very rewarding to see Exotel’s journey from seed round investment to exit to our Investors.”

About Mumbai Angels Network:  Started in 2006, Mumbai Angels Network (MA Network) is India’s premier platform focused on new venture investing. The network is today 500+ members strong, across 9 chapters (Mumbai, Delhi, Bangalore, Kolkata, Hyderabad, Goa, Pune, Jaipur, Chennai) & 25+ cities across the globe. The network today has one of the strongest portfolios in the country with 150+ companies, 70+ exits plus next round investments.