Early-stage venture capital fund Mela Ventures, set up by Krishnakumar Natarajan and Parthasarathy NS, co-founders of Bengaluru and New Jersey-based information technology firm Mindtree, has raised its maiden fund of INR 130 crore (USD 17.5 million).
The newly set up fund aims to back B2B technology startups that can be scaled globally, specifically in areas of artificial intelligence, machine learning, augmented and virtual reality, and quantum computing.
According to Natarajan, managing partner at Mela Ventures, the VC firm decided to invest in B2B and tech companies since that is where their expertise lies. Backed by institutional investors, global technology leaders, and seasoned startup investors, Mela Ventures is targeting to reach INR 200 crore in size. A significant portion of this money has come from individuals, including six Mindtree co-founders.
The fund will invest in around 10-15 companies, according to the company. To begin with, it aims to make four to five investments in the next 18 months, and will write checks worth USD 943,300 to USD 1.3 million.
Parthasarathy said the fund will back startups that are solving a scaleable problem for enterprises. It has already made its first commitment to a startup in AR-VR space which focuses in the retail industry.
Leveraging their expertise and connections in the US and Europe market, Mela Ventures managing partners Natarajan and Parthasarathy plan to help technology firms scale up and reach out to customers in the global market.
“We are by design limiting ourselves to Indian investors so that the money will stay within the country and help the India growth story,” Natarajan, told local media Mint in an interview.
Mindtree co-founders and senior executives have come together to establish the VC firm, a year after the two-decade-old IT firm’s hostile takeover by Indian business conglomerate Larsen & Toubro (L&T). Natarajan and Parthasarathy had let go of their executive responsibilities at the company after the takeover, which they had made numerous attempts to resist.
The founders believe their experience in building Mindtree to a billion-dollar company from a VC-funded startup will be a valuable asset to entrepreneurs, according to the Mint report. They believe, while the right idea and funding are great starting points for a startup, they do not guarantee success.
“The key is to make these innovative ideas co-exist with financially beneficial models,” Natarajan told Mint.
It is not surprising for founders and senior executives of tech and IT companies in India to turn into investors. For instance, Rajan Anandan, former India head of Microsoft and Google is now the managing director of Sequoia Capital (India), while Nandan Nilekani, co-founder of Indian IT giant Infosys, invests in startups through his VC fund Fundamentum. Similarly, Infosys’ co-founder and former executive vice-chairman Kris Gopalakrishnan and former chief executive and managing director SD Shibulal launched Axilor Ventures in 2014 to back early-stage startups.