Anurag Maloo, a businessman from a small town called Seoni near Nagpur, is now a busy investor. No, he doesn’t invest in stocks but startups. The 44-year-old hotelier became a member of India’s leading incubator Venture Catalysts (VCats) a few years ago and has invested in over 30 startups, including BharatPe, an Indian FinTech that has given exits to over two dozen angel investors with over 80x returns in less than three years.
“I never imagined this (80x) kind of returns. I want to thank Venture Catalysts for introducing me to the world of startups and, importantly, to BharatPe. I trusted VCats’ judgment and due diligence on BharatPe, and the result is unimaginable. No asset class could have given me such returns in a span of three years,” said Maloo, who had also invested in startups such as Beardo, Coutloot, and Fynd, amongst others, and taken exits with handsome returns.
Anup Agarwal, another investor from Raipur, is amongst dozen other investors from India’s tiny towns, who made a killing with BharatPe’s recently concluded funding round, that fetched the company a valuation of over $900 million.
Founded in 2018 by Ashneer Grover and Sashvat Nakrani, BharatPe has empowered millions of small merchants with simple new-age fintech solutions such as QR-based payments. It could be the only Indian startup that has the potential to achieve a Unicorn status in such a short period. Indian startups take an average time of eight years to accomplish that feat.
The FinTech raised Series D of $108 million its existing investors Coatue, Sequoia Capital, Ribbit Capital, Steadview Capital Management, Beenext, Amplo, and Insight Partners. Venture Catalysts’ parent company still holds some equity in BharatPe while all the investors in its network have taken the complete exit.
“I wish I could hold my equity till the next round,” says an elated Gaurav Singhvi, an investor partner with VCats from Surat in Gujarat. “Surat is a tier 3 town, and people here still don’t understand about startups. But things are changing, and I am optimistic that exit stories such as BharatPe will pique interest among high net worth individuals in small towns to invest in startups,” said Singhvi, a CA by profession. He has invested in over 30 startups so far and has been working towards creating a strong startup investor community in Surat.
VCats, an early-stage investor, has been instrumental in roping in HNIs from the smaller Indian towns to invest in idea-stage companies.
“Exits such as BharatPe don’t happen often and are not easy. Our team is extremely talented at evaluating and identifying the next big thing in the startup ecosystem. We bet on founders/entrepreneurs who emanate immense confidence, have a great team, are second-time founders, have skin in the game, and have great execution power. Investors need to be doubly sure that their money is in capable hands. Within one hour of discussion with Ashneer (Grover), we decided to invest in BharatPe, which was still in its idea stage,” said Anuj Golecha, Co-founder of VCats. He also added that post-BharatPe’s exit queries on startup investing have increased on VCats’ platform.
BharatPe’s success story also speaks volumes about VCats’ ability to spot potential Unicorns early on and bet on them. VCats was one of the first to back BharatPe in 2018.
Talking about the association with VCats’, Ashneer Grover, Founder of BharatPe, said
“I got introduced to Venture Catalysts through a friend. We met Anuj Golecha (co-founder at Venture Catalysts), and in the first meeting he gave us his commitment. Venture Catalysts came in as the largest investor in our angel round. Interestingly, many of the investors (on VCats network) that participated in our Angel round were from smaller Indian towns. This is phenomenal and just proves that the startup ecosystem has moved beyond the metros.”
VCats has converted several traditional small-town business people into full-time startup investors and provided them healthy returns through timely exits. In the last two years, VCats has successfully exited from about 36 successful exits startups such as Beardo, Confirmtkt, Dukaan, Rentomojo, Coutloot, and PeeSafe.