30 April 2018, Bengaluru. Unitus Ventures, India’s leading impact venture fund investing in startups innovating for the masses, today announced that it has raised INR100 crore towards first close of its INR300 crore ($46 million) second fund. Prominent investors include Michael & Susan Dell Foundation, Bill Gates, Hemendra Kothari, Ajay Parekh, Pradeep Singh, Pramod Saxena, Padma Chandrasekaran and Ravi Venkatesan among others. The fund plans to invest in 25-30 early stage startups in healthcare, education and inclusive fintech.
“The opportunity to bring together private capital and market-based principles for social change is significant,” said Bill Gates, co-founder of Microsoft. “I’m optimistic about the growth prospects in India and am pleased to invest again with Unitus.”
Fund I Background and Progress
Founded in September 2012 by Dave Richards, Will Poole and Srikrishna Ramamoorthy, Unitus Ventures closed their first fund in 2013 at INR 140cr and made 23 investments in sectors including healthcare, education, technology and e-commerce. Some of their investments include Hippocampus Learning Centres – currently with 300 semi-urban and rural kindergarten centres; BetterPlace – serving hundreds of marquee B2B customers by verifying and providing services to more than 1 million employees; and DriveU – on demand driver service that is currently averaging 1000 daily rides across all major metros.
The fund has begun returning capital to investors from secondary exits in Cuemath and two other acquisitions. Overall, Unitus Ventures’ 14 active investees have already directly impacted over 1.2 million low-income lives across 21 states in India, displaying a 102% growth in 2017.
“We’ve had a good run with our first fund and are now raising twice as much to invest in entrepreneurs and teams that are creatively tackling some of India’s unique challenges in healthcare, education and access to finance” said Srikrishna Ramamoorthy, Partner, Unitus Ventures. “We’re putting more capital to work with larger initial and follow-on investments and bringing to bear our networks to help founders succeed”.
“With less than 10% of early stage VC funding going to healthcare and education, there is scarcity of capital for good companies in these sectors. We are one of very few investors who have dedicated majority of their funds towards these sectors that are so critical for the growth and health of India,” said Will Poole, Co-founder and Managing Partner at Unitus Ventures.
He added, “We’re pleased to have been the first institutional investors supporting UE LifeSciences with their iBreastExam product, and Cuemath who is disrupting India’s K8 tuitions market with micro-franchised affordable learning programs and that has raised follow on funding from investors Sequoia Capital and Capital G. We’re equally enthused about our newest investments in Awign, Predible and others, who are all getting their businesses into high growth mode.”
New Opportunity: India First, Global Next
In its new investment strategy, Unitus Ventures is betting that India is an archetype for global emerging markets and is the best market to prove scalable products and services for mass low-income consumers. Once established, select portfolio companies can expand to emerging markets in South East Asia, Africa and Latin America. Reaching global scale requires targeting the mass market in India which has insatiable but hard to service demand. A critical success factor is that products, services, and distribution channels need to be built ground up and at highly-affordable price points, which calls for an inventive and entrepreneurial drive and frugal innovation. Once these innovations have succeeded in “India First”, Unitus will help its startups avail themselves of the even larger “Global Next” opportunity.
Several of Unitus’ investees who have successfully expanded into international markets are UE Life Sciences whose iBreastExam product provides affordable breast cancer screening services across emerging markets through its partnership with GE; GoCoop – India’s largest online marketplace for handlooms and handicrafts that services a number of global B2B buyers; Utter, a mobile platform delivering English and workplace skills training in India as well as via mobile operators in Myanmar, Bangladesh, Kuwait, and Qatar; and Hippocampus – affordable quality kindergarten centres for rural India, now operating in rural Mexico as well. These startups are also able to leverage the Capria Network of funds in emerging markets of which Unitus is a founding member.
Fund II: Bigger Ticket Sizes, Three Sectors
In its new fund, Unitus Ventures will focus on three sectors – education, healthcare and inclusive fintech. Increasing the average initial investment size to up to INR5 crore, Unitus will invest in 20 – 30 startups in Fund II and reserve capital for follow-on rounds of the best performing companies.
“Amongst India’s leading early-stage impact investors, Unitus Ventures complements our catalytic efforts in developing the next wave of scalable solutions in the areas of affordable, high quality education, employability, and financial inclusion. Given the impressive impact outcomes of the first fund, we’re excited to continue our support for the new fund” said Geeta Goel, Country Director, India, Michael & Susan Dell Foundation
Unitus Ventures has already made six investments from Fund II. These include Awign – a tech platform for businesses to execute tasks, packaged as internships for India’s college workforce, Predible – cloud-based AI-driven productivity solution for for radiology, Utter – chatbot-based learning platform for digital blue-collar workers and i3 Systems – data-centric health insurance underwriting and claims.
About Unitus Ventures
Unitus Ventures is the leading impact venture fund investing in startups innovating for the masses in India, focusing on healthcare, education and inclusive fintech. Founded in 2012, Unitus Ventures is a part of the Capria Network, the leading global network of impact fund managers, focused on addressing the “missing middle” finance opportunity by investing in high-growth businesses in emerging markets of Africa, Asia and Latin America. Capria Network is managed by Capria Ventures, a leading global investment firm, and is part of Unitus Group, a premier financial services group operating in India and other emerging markets since 2000. Unitus Ventures is based in Bangalore and Seattle and is a member of the India Impact Investors Council.