News

No slowdown in start-up funding: Keiretsu Forum’s Rajan Srikanth

N Ramakrishnan Chennai | Updated on July 15, 2018 Published on July 15, 2018

Rajan Srikanth   -  N. Ramakrishnan

‘Profile of our deals different from peers; done 3 deals of over ₹1 cr each in 2018’

In the three-and-a-half years since it started investing in start-ups here, the Chennai chapter of Keiretsu Forum, a US-headquartered group of angel investors, has completed 56 deals. “It is continuing at a pace that increases every year,” says Rajan Srikanth, co-President, Keiretsu Forum Chennai and Singapore.

For the first half of 2018, he says, the angel investment group has funded six start-ups and invested about $1 million (₹6.5 crore). Last year, it did 20 deals and put in about $1.3 million (₹8.5 crore).

“This year, we are either on track to make 20 deals or probably exceed that, because the first half of the year is generally slow,” says Srikanth.

According to him, this year, in terms of the total size of the investments, Keiretsu Forum has done more in six months than it did in the first part of last year. In the first half of this year, Keiretsu Forum has done three deals of over ₹1 crore each, according to him.

“We are not seeing any slowdown on our side. That is because the profile of the deals that we bring is still different from what most others are able to bring. One, these are deep-tech deals. In some sense, we are the first place that IIT Madras incubated companies come to,” says Srikanth.

That is because of the strong relationship that Keiretsu Forum Chennai members have had with the IIT-M ecosystem. Srikanth, an alumnus of IIT-M, and a number of other Keiretsu members mentor IIT-M incubated start-ups. It is but natural, says Srikanth, that these start-ups should first come to Keiretsu when they are looking to raise funds.

Another reason that start-ups prefer Keiretsu Forum to other angel groups, says Srikanth, is because of the structure of the deals that Keiretsu puts in place. “We are willing to go with CCPS (compulsorily convertible preference shares) where most of the other angels insist on equity deals. Therefore, we put off the difficult discussion around valuation,” says Srikanth.

Keiretsu has just completed two deals with two IITM incubated start-ups. In the first deal, it invested about ₹1.5 crore in Fib-Sol Life Technologies, founded by Kavitha Sairam and Anant Raheja, both PhDs from IITM. Fib-Sol has developed an ultra-light weight, bio-degradabe and water soluble nano fibre carrier for bio-fertilisers. The second venture is Fabheads Automation Pvt Ltd, founded by Dhinesh Kanagaraj, a BTech in Aerospace Engineering from IITM. Fabheads specialises in developing automated technologies for composite manufacturing. Keiretsu has invested about ₹2.4 crore in this venture.

In both these companies, Keiretsu was the first institutional investor and in both the ventures, Keiretsu had a relationship with the founders as their mentors.

35% investments in US cos

According to Srikanth, Keiretsu’s strength is that it is able to curate and provide specialised companies in specific areas. “We are able to bring deep-tech because of our access to companies from outside.” Nearly 35 per cent of the investments made by Keiretsu Chennai are companies in the US, the ventures having been referred to it by Keiretsu chapters in the US.

Both Fib-Sol and Fabheads are in the product testing phase. They have completed product development and both may have some Beta customers, but they do not have any substantial revenue. Both these ventures, according to Srikanth, will need the money and the mentorship of Keiretsu’s members to take the product to market.

Published on July 15, 2018

A letter from the Editor


Dear Readers,

The coronavirus crisis has changed the world completely in the last few months. All of us have been locked into our homes, economic activity has come to a near standstill. Everyone has been impacted.

Including your favourite business and financial newspaper. Our printing and distribution chains have been severely disrupted across the country, leaving readers without access to newspapers. Newspaper delivery agents have also been unable to service their customers because of multiple restrictions.

In these difficult times, we, at BusinessLine have been working continuously every day so that you are informed about all the developments – whether on the pandemic, on policy responses, or the impact on the world of business and finance. Our team has been working round the clock to keep track of developments so that you – the reader – gets accurate information and actionable insights so that you can protect your jobs, businesses, finances and investments.

We are trying our best to ensure the newspaper reaches your hands every day. We have also ensured that even if your paper is not delivered, you can access BusinessLine in the e-paper format – just as it appears in print. Our website and apps too, are updated every minute, so that you can access the information you want anywhere, anytime.

But all this comes at a heavy cost. As you are aware, the lockdowns have wiped out almost all our entire revenue stream. Sustaining our quality journalism has become extremely challenging. That we have managed so far is thanks to your support. I thank all our subscribers – print and digital – for your support.

I appeal to all or readers to help us navigate these challenging times and help sustain one of the truly independent and credible voices in the world of Indian journalism. Doing so is easy. You can help us enormously simply by subscribing to our digital or e-paper editions. We offer several affordable subscription plans for our website, which includes Portfolio, our investment advisory section that offers rich investment advice from our highly qualified, in-house Research Bureau, the only such team in the Indian newspaper industry.

A little help from you can make a huge difference to the cause of quality journalism!

Support Quality Journalism
This article is closed for comments.
Please Email the Editor
You have read 1 out of 3 free articles for this week. For full access, please subscribe and get unlimited access to all sections.