Gazelle Ventures, a venture capital fund based in Singapore, is gearing up to make investments in early-stage startups in India that operate in tier-2 cities and not the typical ‘startup-friendly’ Indian metropolises such as Bengaluru, New Delhi-NCR and Mumbai-Pune, Tanmay Bhargava, managing partner at Gazelle Ventures India Pte, told FactorDaily.
“We are planning to invest in startups in smaller cities such as Coimbatore and Jaipur where there is quite a bit of interesting startup activity happening, and we are keen to help develop the entrepreneurial ecosystem in these cities,” Bhargava said. The areas the fund is specifically aiming to target are manufacturing, agri-tech, clean tech, waste management, and social enterprises. The size of the fund, at this point, is a modest $20 million, and it is yet to make its first close.
The parent organisation of Gazelle Ventures is the US-based fund Community Development Venture Capital Alliance (CDVCA), which has invested around $150 million in several US startups based out of smaller towns and cities. Gazelle Ventures aims to follow its business model of providing equity capital to businesses in under-invested markets.
“We are planning to invest in startups in smaller cities such as Coimbatore and Jaipur where there is quite a bit of interesting startup activity happening, and we are keen to help develop the entrepreneurial ecosystem in these cities” — Tanmay Bhargava, managing partner at Gazelle Ventures India Pte
Interestingly, Bhargava reveals that the fund was close to making its first investment in a Coimbatore-based agri-tech company, which unfortunately got wiped out following the government’s demonetisation effort. One of the enterprises Bhargava is looking to invest in currently is the Bengaluru-based Saahas Zero Waste Solutions, a social enterprise in the waste management space that partners with bulk waste generators to provide them solutions that enable them to emerge as zero waste entities. It also offers products made from waste, including compost and a range of recycled products.
For startups in smaller Indian cities, fundraising is often a challenge. Traditional venture capital firms prefer to bet on companies headquartered in cities like Bengaluru, Delhi and Mumbai. While larger VC funds such as IDG Ventures and Kalaari Capital have invested in companies in smaller towns, Gazelle Ventures is part of a small clutch of investors and angel networks who are looking specifically at entrepreneurial talent in these areas, such as Chandigarh Angels Network, Swan Angel Network, and Nativelead Foundation.
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Disclosure: FactorDaily is owned by SourceCode Media, which counts Accel Partners, Blume Ventures and Vijay Shekhar Sharma among its investors. Accel Partners is an early investor in Flipkart. Vijay Shekhar Sharma is the founder of Paytm. None of FactorDaily’s investors have any influence on its reporting about India’s technology and startup ecosystem.