SEBI approved early stage venture capital firm, YourNest Angel Fund, has announced its first investment in a Noida based company called Proof of Performance Data Services (PoP). The startup is in the space of video analytics and currently operates in three verticals – Out of Home Advertising Industry, Roads and Highways and Environment. It offers insights to decision makers based on Video Analytics from the archives of the real world videos, available on its cloud based platform, christened Earthive. These videos are captured through pre-defined drive-throughs within the city at regular intervals. The high definition videos and allied data such as GPS coordinates are then mined to extract the required business intelligence. The investment made by YourNest will be used for strengthening infrastructure facilities, product extensions, technology adoption and international expansion for Earthive.
We spoke to Mr. Sunil K. Goyal, CEO & Fund Manager, YourNest, who is now also a Director in the Board of Proof of Performance Data Services, subsequent to this investment. He will help the founders with strategy and international expansion. We tried to probe into the factors that made YourNest invest in PoP and the criteria’s they look for before taking an investment plunge.
1. You have invested in PoP recently. What is the amount that has been invested (and at what stake)?
YourNest prefers to invest Rs.3-5 crore for an equity stake of 25-35 per cent in the portfolio company. PoP is well within these limits.
2. What factors do you look into before investing in an organization?
YourNest looks for an entrepreneurial team that demonstrates exceptional execution abilities. The opportunity being pursued by them must offer a solution that has an innovative or a localized business model. YourNest prefers ventures that have scalability built-in with the use of technology.
PoP has successfully demonstrated a use case for the Outdoor Advertising Industry, for media planning and monitoring. PoP provides a robust tamper-proof data for accountability and advanced analytics and measurements, as a “neutral 3rd party service provider” for the advertising & media industry.
The same set of videos will also be analyzed for other verticals, like Urban Development, Roads & Highways, Law Enforcement, for additional revenue streams such as market planning and urban development. In each of these areas, the PoP has a unique offering that seek to change the way performance has been mapped and evaluated. The entrepreneurial spirit in finding innovative solutions for multiple use cases encouraged us to rally behind this team. YourNest will support expanding operations across major cities in India and the international markets
3. You make early stage investment in companies but at the same time you seek to raise Rs.100 crore from Indian investors. How does a Startup get the confidence that you can help and sustain them?
YourNest is a domestic venture capital fund registered with SEBI. It has IL&FS Trust Company Limited as its Trustees. This creates confidence for us among the entrepreneurial community. Our inherent compliance mechanism ensures YourNest to commit within the available investible surplus with the Fund.
4. Is there a specific sector wherein YourNest invests?
YourNest is a sector independent fund. Our focus is always to find ventures that are attempting path-breaking use of technology or have an innovative business model. We also look for companies that are built on a scalable and SMART Idea or represent an emerging sector. We are interested to invest across sectors and normally look for technology enabled businesses. That pretty much sums up our investing focus.
5. What is your perfect idea of a Startup?
A perfect Start-up for YourNest is the one having
- An exciting feedback from its initial customers.
- A unique solution.
- Validation that the idea really crossed the incubation phase.
- A sustainable and scalable business model
- Larger market size that can be addressed with an opportunity
- An entrepreneur who can run miles with this angel funding
6. Startups’ don’t look for money alone before asking for funds. There are many other factors involved with the same. What is the extra edge that YourNest brings to the table?
YourNest is not a fund for someone looking only for money. It prefers to fund the first generation entrepreneur through mentoring, coaching, and business process development. YourNest offers support, constant guidance, handholding, expertise in business strategy, defining the business model, building the start-up team, enabling stronger processes and so on.
7. What is your advice to Startups looking to raise funds?
My advice to the budding startup is vanilla plain and simple. Bootstrap the startup until the concept is proven and the customer is ready with raving reviews. Build capabilities on business development faster with induction of the right team members and share your vision with almost everyone you meet. Getting traction through word of mouth is one of the biggest advantages a startup can leverage on.