THE MONEY-MAKERS

Success, disappointment, hope: Notes from an Indian angel investor’s diary

Watering the right plant.
Watering the right plant.
Image: Reuters/Sivaram V
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Launching a startup in India is a massive struggle.

Despite being the third-largest tech startup ecosystem in the world, India has an acute shortage of seed funding, which is secured shortly after a company is first incepted. In 2018, seed funding in India dropped over 20% compared to a year ago, according to a recent report released by IT industry body Nasscom.

Investments in new firms are hard to come by because statistics show that it’s a very high-risk bet. Nine in ten Indian startups die within the first five years.

However, as the ecosystem matures, a handful of angel investors have found the secret sauce to success and hit gold multiple times. One such investor is Anirudh Damani, managing partner at Artha Venture Fund and an angel investor in 57 startups.

Damani’s angel investments include unicorn budget hotels chain OYO, online cosmetics retailer Purplle (that turned profitable in under four years), pregnancy and parenting-tips platform BabyChakra (which has raised funds from several foreign investors), and omnichannel fashion e-commerce site Fynd (now also backed by Google). He has successfully exited several investments.

Quartz asked Damani to share his mantra for investing in a startup. Below are the reasons for some of his biggest bets and how the investments turned out: