Matrix Partners India, the Mumbai-based early-to-growth stage venture capital investor, has initiated a seed stage investment programme, targeting startups in the Internet and mobile sectors. The firm has also invested undisclosed amounts in two early stage companies. The first is an unnamed stealth mode Internet social commerce company and the second is a Series A investment in Indore-based mobile applications and games development company Twist Mobile.
“The newly established seed stage investing program demonstrates our commitment to early stage investing in India. The Indian mobile opportunity is a key focus area for new investments,” Rishi Navani, managing director, Matrix India, said in a press release. The seed initiative comes on the back of a renewed interest among venture capital investors in pre-revenue and pre-Series A stage startups over the past couple of years.
Though the numbers don’t as yet reflect the growing interest — the seed stage saw 30-odd announced deals worth about $20 million last year — leading investors such as Sequoia Capital and Nexus Venture Partners, who earlier played primarily in the post Series A stages, now have a dedicated focus on seed stage companies. Sequoia, for instance, invested in eight seed stage startups in 2011 as part of a deliberate drive within the firm to catch startups younger. In January last year, Nexus launched an initiative called Nexus Seed under which it proposes to invest anywhere between $50,000 and $500,000 in 50 seed stage technology startups over the next five years. The market has also seen the emergence of investors such as Blume Ventures and more recently, India Quotient, which have raised funds specifically to invest between the angel and pre-Series A stages.
The Matrix India seed programme, which does not detail any specific allocation to such companies, in some ways brings the firm back to its founding focus. The Palo Alto, California-headquartered venture capital investor entered India in 2006 with a $150 million fund and a mandate to invest in early stage companies. During this period it invested in companies such as online classifieds site Quikr and local search engine AskLaila. However, in mid-2007 it announced a change in strategy and decided to broaden its focus to growth investments. The size of Fund I was boosted to $450 million to accommodate the growth focus. Since then it has invested in companies such as microfinance institution Bhartiya Samrudhi Finance or Basix, gold financing company Muthoot Finance, test preparation company FIITJEE and corporate stay solutions provider Siesta Hospitality.
The renewed focus on early stage companies though is not sudden. When the firm raised its second India fund last April, with a corpus of $300 million, it said that up to $30 million would be invested in early stage companies across sectors such as the Internet, mobile, healthcare, education and financial services. The firm’s website currently lists a portfolio of 20 companies across multiple stages.
Twist Mobile, one of the two investments announced today, was founded by former Gameloft executive Virat Khutal. The company, founded in 2009, claims more than 70 million downloads across 28 games and apps to date. It earlier raised an undisclosed amount in seed funding from Achal Choudhary, member of Indore Professional Studies Academy. Twist Mobile is Matrix’s fourth investment in the Indian mobile sector.
Image courtesy: Matrix Partners India