Amidst a 53% decline in total funding for Indian startups in 2023 compared to the previous year, Anicut Capital remains undeterred. Recognizing the growth potential amidst challenges,
the firm plans to intensify its support for startups across various sectors. Notably, it presently invests in Software as a Service (SaaS), Direct-to-Consumer (D2C), logistics, and fintech, among others.
Strategic Investments Across Segments:
Veenu Mittal, Chief Financial Officer (CFO) of Anicut Capital, shares insights into the firm’s investment strategy. With a focus on both private credit and venture capital,
Anicut Capital distinguishes itself by nurturing startups from their inception to growth stages. Mittal projects a continued momentum, with plans to invest in 15-20 startups annually, spanning SMBs, seed investing, and early-stage funding.
Foundations of Success:
Founded by Ashvin Chadha and IAS Balamurugan, Anicut Capital stands out as a financial institution offering a comprehensive suite of investment opportunities.
Since launching its first private credit fund in 2016, the firm has expanded its portfolio to include ventures across diverse industries, from aerospace to fintech.
Adapting to Changing Dynamics:
The funding landscape has witnessed a shift towards sustainable growth and profitability post-2021 highs. Mittal identifies this transition as a “healthy correction,” emphasizing the importance of sound business economics.
Amidst this evolution, Anicut Capital remains committed to supporting fundamentally-driven ventures with robust leadership.
Focus Areas and Investment Strategies:
Anicut Capital’s investment philosophy revolves around identifying value-driven businesses with global scalability. While private credit extends primarily to Tier II and III city-based enterprises, venture funding targets startups in metro areas across various sectors including electric vehicles, consumer tech, and fintech.
Expansion and Fund Management:
Anicut Capital’s journey of growth is reflected in its fund expansions and strategic deployments. With successful closures of previous funds, the firm is poised to launch new funds to cater to evolving market demands. From private credit to late-stage pre-IPO funding, Anicut Capital diversifies its offerings to address the spectrum of startup needs.
Investor Confidence and Returns:
Backed by a diverse pool of investors including HDFC and SIDBI Fund of Funds, Anicut Capital maintains investor confidence through consistent returns. With an internal rate of return of around 17% in private credit and a multiple on invested capital of approximately 1.9 in venture funding, the firm’s performance underscores its credibility.
Navigating Future Opportunities:
As Anicut Capital embarks on its mission to empower startups, it remains cognizant of its responsibility towards investors and founders alike. With a prudent approach towards capital deployment, the firm prioritizes capital preservation while fostering growth opportunities.
Conclusion:
Anicut Capital’s journey epitomizes resilience amidst market fluctuations, symbolizing a beacon of hope for startups navigating uncertain terrain. With an unwavering commitment to fostering innovation and sustainability, the firm continues to redefine the contours of startup funding in India.
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