Mumbai, India-based portfolio management service provider Piper Serica launched an angel fund to invest in tech-enabled startups. The company announced the news on June 22, 2022. The fund size for the Securities Exchange Board of India (SEBI) registered category 1 angel fund is USD 12.7 million (INR 100 crore). It aims to invest in early-stage startups that leverage technology to either disrupt or dramatically improve industrial processes as well as the industry itself.
Purpose of the Fund by Piper Serica
The fund set by Piper Serica aims to reduce the risk of high mortality in its portfolio. The Mumbai-based venture capital will support 30 to 40 startups in the three-year period.
Meanwhile, the angel fund will focus on startups with exponential growth models. The seed-to-IPO fund will back some of its portfolio companies for a period of up to 10 years. Besides, the firm is eyeing a longer holding period as it improves not only the success rate but also the internal rate of return (IRR). The company outlined the statistical figures for the same.
“Early-stage funds with an average holding period of 3 years have 78% failure rate and 11% IRR while those with nine years of holding have 64% failure rate and 30% IRR,” said the statement released by Piper Serica.
The firm may launch an alternative investment fund in the coming future.
The tool used by Piper Serica
In order to screen investment opportunities, Piper Serica will make use of its proprietary tool, Yoda.ai. The AI ML-based tools use 17 parameters to predict the probability of success. It then selects the startup that scores 70 per cent or above for further screening.
What the Fund Manager has to say
Piper Serica’s founder and fund manager, Abhay Agarwal, said, “It is a very exciting time to invest in startups in India just as the startup ecosystem is ramping up. We are seeing some exceptional talents aspire to become entrepreneurs. India’s economic growth over the next decade will create hundreds of unicorns. HNI investors should definitely allocate a portion of their equity portfolio to startups with the objective of making high returns over a long holding period. At the same time, investing in startups is fraught with risks; therefore better to invest through a well-managed fund”.
About the company
Established in 2003, Piper Serica is a Mumbai-based portfolio management service provider. It is registered under the Securities Exchange Board of India (SEBI). The PMS company has access to domestic and international investors in the Indian equity market. Its portfolio boasts companies such as Info Edge, Dixon, Apollo Hospitals, Affle, Jubilant Foodworks, etc.
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