As investors get cautious about dealmaking in India amid the coronavirus outbreak and their appetite to fund early stage startups begins to evaporate, one venture capital fund is stepping up to make that void smaller.
WaterBridge Ventures, an investor that has cut some of the earliest checks in startups such as edtech firms Unacademy and Doubtnut, and Atlan, which helps enterprises better manage data, and Canadian online pharmacy PocketPills, has launched Fast Forward, a program with a committed $10 million from its second fund to finance Seed and pre-Series A rounds in more than a dozen startups.
Any early-stage startup can apply in Fast Forward by answering 10 questions, and WaterBridge partners will engage with them virtually and conclude whether they want to invest within 10 days, said Manish Kheterpal, founder and managing partner at the VC fund.
“Most young entrepreneurs in India have little to no experience. They have either just graduated, dropped out of college or are first time entrepreneurs. If we put a classic VC lens to evaluate these businesses, they don’t make the cut. Many of these young ideas have the potential to become game changing businesses with sensible and early guidance. We want to back some of those ideas,” said Kheterpal in an interview with TechCrunch.
The launch’s timing is also interesting. Kheterpal, a veteran investor, said WaterBridge began exploring the program last year and the coronavirus crises convinced him to launch it now as it could serve a greater purpose.
Several early-stage startups have told TechCrunch in recent weeks that they are finding it incredibly challenging to get in touch with some VCs in the country amid the coronavirus crises.
Founder of a social commerce startup who requested anonymity said that most VCs he has attempted to reach out are currently only engaging with founders they knew from prior to the outbreak.
“We think it’s exactly the right time to invest. History has shown us that some of the best firms have emerged from the crises,” said Kheterpal.
The startups that are selected in Fast Forward will have the capital in their bank account in 20 days. The check comes in two sizes: $135,000, aimed at startups that have not built the product yet, and $330,000 for those who have some semblance of the product but may not have started to generate revenue yet. WaterBridge Ventures will take 15% equity in the startup in return.
Fast Forward is open to investing in nearly every category, though it is avoiding at least two: Hardware manufacturing and real estate, two areas that have proven challenging for scale in the country.
Fast funding is not a new idea, though it’s yet to receive wider traction among VC funds. NFX, an investor in early-stage startups, launched a seed-funding initiative last month to invite founders in the U.S. to apply for seed funding of $1 million to $2 million in exchange for 15% of their company.