ISME ACE plans to create ₹100-crore fintech fund

ISME ACE, an accelerator for fintech start-ups, plans to set up a ₹100-crore fund that will be used for leading investments in disruptive start-ups.

The plan is to raise the fund from various institutional investors including that of Three Sisters Institution, promoted by YES Bank MD and CEO Rana Kapoor and run by his daughters — Radha, Raakhe and Roshni.

Talking to BusinessLine, Aparajit Bhandarkar, Chief Acceleration Officer at ISME ACE, said, “We plan to set up a ₹100-crore fund that will be used to invest in fintech start-ups over the next two-three years. We are stepping in to increase the declining seed investments in the fintech segment.”

Bhandarkar further added that the seed investments in the first half of 2017 almost halved to $49 million from $104 million in the year-ago period. However, he declined to give a time-line to the new fund but added that ISME ACE plans to have five cohorts of about 10-12 fintech start-ups each. The accelerator would typically invest $100,000-200,000 in each start-up by picking up 5-12 per cent equity, Bhandarkar said.

Besides the seed funding, the accelerator would also offer start-ups access to the financial, investor and entrepreneurial ecosystem, workspace infrastructure support, advisory guidance and need-based mentorship.

To this Raakhe Kapoor Tandon, Founder of ISME ACE, said, “The financial services industry is at an inflexion point owing to new technologies such as Blockchain, AI, IoT, and Big Data, and Government initiatives such as IndiaStack, along with higher mobile & internet penetration. We (ISME ACE) aim to leverage this change, by promoting and investing in disruptive B2B/B2C finTech start-ups. We plan to accelerate over 100 startups in next three years.”

Bhandarkar further added that ISME ACE has announced its first batch of start-ups comprising six new age fintech companies, selected from over 547 applications received from 23 countries. The start-ups — Moneytor, Cashcow, Trendlyne, Smartcoin, Open Financial and Artoo — provide solutions in the emerging segments of new-age financial services, including alternative lending, banking technology and investment/wealth management technology. All the six start-ups are generating revenues with market-ready products/services and are leveraging ISME ACE as a plug and play launch-pad for the next phase of growth.

“We may infuse additional growth capital, if required. We intend to stay invested and work closely with the start-ups with no plans to exit before Series C stage, or even IPO / trade sale in case of couple of start-ups,” he added.