Unitus launches second fund of $50 million, to fund 50 startups

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Unitus Seed Fund is launching a second fund of $50 million (Rs 340 crore) focused on India. The fund will invest the amount in around 50 startups with each company receiving between Rs 1 crore and Rs 3 crore. The fund invests in startups based on their potential impact in sectors like education, healthcare, fintech and agriculture.

The first fund of the Bengaluru-based investment firm was $23 million and its investors included Bill Gates’ Gates Foundation, Ranjan Pai, Mohandas Pai and others. Most of the participants in the first fund are also expected to invest in the second fund. It has almost fully deployed the first fund, which was established in 2012. Unitus expects to get the first tranche of the new fund by the third quarter of the calendar year.

“At a time when there is a pullback by some investors, it is important that we have money to help our companies survive with follow-on funding,” Will Poole, co-founder and managing partner of Unitus, told PTI. He added that the investment firm’s portfolio startups has a high survival rate with just three write offs and two partial recoveries. Eight companies from Unitus have raised Series A funding (first big round), two have raised Series B and one startup is about to raise Series C investment.

“In good companies, we plan to participate in follow on fund raising as well,” Poole said. Unitus raised almost a third of its first fund from Indian investors. This proportion is expected to be higher in the second fund. “When we went to meet potential investors for the first fund, we got blank stares. Now they understand what we are doing,” says Srikrishna Ramamoorthy , partner with Unitus.

Ramamoorthy added that the investment firm never compromised on returns for impact. He said the success rate has helped the fund to attract mainstream venture capital funds to participate in subsequent rounds of funding of their portfolio companies. Poole said that the criteria to measure impact are creation of jobs, incremental income generation, access to information, supply chain and efficiency. Unitus said it met around 2,000 startups before investing in 23. “We avoid ‘me too’ startups and ask entrepreneurs to conserve capital,” added Poole.

The portfolio of companies that Unitus Seed Fund has invested in includes DriveU, Hippocampus, Blowhorn, iBreastExam, Jack on Block, Labinapp, AddressHealth, and BetterPlace.

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