Indian tech honchos turn angel investors

BANGALORE: There is an emerging breed of tech professionals donning the angel investor hat in India. These include big names like Rajan Anandan, MD of Google India, Deep Kalra, CEO of Makemytrip, Vishal Gondal, CEO of Indiagames, and Raman Roy CMD of Quattro BPO Solutions.
Even relatively younger entrepreneurs, like the founder of InMobi, Naveen Tiwari, who recently invested in e-commerce logistics enabler Chottu.in, are seeding startups.At the angel stage most startups have business models or ideas defined, but do not necessarily have a regular revenue inflow or client base. So tech professionals typically invest in small groups or use angel networks like Mumbai Angels to reduce risks while taking stakes in tech startups.
Early stage venture capital (VC) investments in India have been slow to take off, as it requires a larger risk appetite. VC firms, which are answerable on a quarterly basis to their limited partners, generally shy away from deals at this stage.
Sharad Sharma, who has been amongst the earlier set of angel investors in India -- right from his days as the R&D chief at Yahoo India -- said the main driver for this trend is the addiction to entrepreneurship.
The profile of many of the investors reveals that they have always had a serial entrepreneurial streak. “It is in the blood for many of us. Angel funding is like a proxy for entrepreneurship,” added Sharma.
In recent times newer faces, like the founder of Applabs Sashi Reddi, have joined the bandwagon. A few days ago he invested in Mumbai-based renewable energy startup Green India Building Systems and Services (GIBSS). Sunil Singh, MD - India of software R&D services company GlobalLogic, has funded startups in the Silicon Valley in the past, but now he has his eyes set on Indian tech startups.
“One thing common amongst the angels is the interest in technology. Our day jobs deal with maybe one area of technology, but angel investments enable us to create an impact in multiple areas of technology,” Singh said. He recently invested in e-commerce portal allschoolstuff.com.
Entrepreneurship as an asset class is increasingly becoming attractive. With the growing economy and wide area of applications and opportunities for technology and technology-enabled services, the prospects are promising. There have also been some good exits for angel investors in companies like InMobi and One97 Communications when VCs took stakes in these companies. Investors are not just targeting technologies targeted at the enterprise like cloud and analytics, they are also becoming interested in consumer-oriented technologies. Online dating services start-up TwoMangoes recently raised angel funding from Andy Jasuja, the CEO of Sigma Systems, an IP solutions services company.
Many startups at the angel investment stage lack expertise around marketing, financing, etc. The technology professionals bring in industry experience and contacts, which are very important at the infancy stage. The size of investments typically are in the Rs 1-2 crore range. The investors also take board positions in these startups.
Though most technology professionals prefer to invest in areas they have a background in, some also look at non-tech investments. GlobalLogic’s Singh has invested in Bakers Circle, which makes dough and desserts. Rajan Anandan has invested in a boutique investment bank Viedea Capital. There are no official numbers on the total size of angel investments made in technology startups in India, but industry observers say that deals are much more frequent these days as more angels and startups emerge. The Indian Angel Network (IAN), which also includes angels who focus on non-tech investments, closed 10 deals amounting to about $7 million last year.