BENGALURU: TV Mohandas Pai, a prolific angel investor and an outspoken commentator on civic issues, is occupied nowadays with creating an investment empire straddling an assortment of asset classes.
Ultimately, Pai, who in his post-Infosys avatar has focused mostly on early-stage investments in technology startups, wants to build what he says will be an “ecosystem” of funds with arms concentrated on private equity, real estate, late-stage capital, early-stage high returns funds and promoting women entrepreneurs.
This month, his latest fund, a Rs 250-crore real estate fund called Neev Asset Advisors, will write its first cheque, the terms of which are undisclosed. Work is underway on a dollar fund.
So far, Pai, who began his investing career in 2012, has channelled thousands of crores of rupees into 145 startups, including Byju’s and Zoomcar, through 10 funds. Pai is steadily emerging as a major source of much-needed domestic capital in a startup industry heavily dependent on foreign money.
“In three-five years, we should be very large across many asset classes,” Pai said during an interview last week. “We are creating an ecosystem.” Each fund in this ecosystem — he didn’t say how many funds it would have eventually — has its own investment managers, its own advisors and investment committees, Pai said.
“They compete with each other. Some of them co-invest. And nobody has an influence on their investment philosophy,” he said, adding that he expects his network will be able to absorb a billion dollars in capital in the next couple of. Aarin Capital, which Pai started along with the CEO of Manipal Education and Medical Group Ranjan Pai, is the anchor investor in all the funds. Ranjan Pai is also a material and significant partner in the funds. “We have 10 funds, 145 (portfolio) companies, and $325 million invested, going up to $625 million in two years,” said Pai.
This year, his sons Pranav and Siddarth started a private capital fund, 3one4capital, with family money (Aarin hasn’t put money into this). Together with his sons, Pai, as an angel investor and not through his funds, has been part of 37 deals since January, of which eight were in companies they already backed.
“This year, I am focusing more on follow-ons and up-rounds (investments at higher valuations in portfolio companies),” said Pai, adding that he focuses on the scalability of an idea, the quality of the team, and the use of technology while making investments.
Pai believes that the major differentiator of his funds is the personal risk capital that goes into them. “Our differentiation is that in all our funds, we have put in our money…ranging from 15% to 100%. When we put our money at risk, limited partners (who are investors in funds) will come saying these guys are different,” he said.
“Mohan brings corporate, legal, policy, financial acumen in one person along with funds, of course. His network and mentoring will be valuable to startups,” said Senapathy ‘Kris’ Gopalakrishnan, cofounder of Infosys and Chairman of Axilor Ventures.
Among the funds Pai has backed, SAHA Fund, in which he invested last year, stands out for being focused on women entrepreneurship. “(Pai) is a big supporter of women entrepreneurs. He has pushed us to focus on scalability, governance and the quality of the entrepreneurial team while making investments,” said Ankita Vashisht, CEO, SAHA Fund.
Pai’s influence extends beyond startups. He was a member of the Union Finance Ministry’s Kelkar Committee for reforming direct taxes. His larger vision is to improve the quality of education and education management in the country by creating an open system of schooling, bringing in autonomy for universities, as well as funding for research.
In 2000, Pai cofounded the Akshaya Patra Foundation in Bengaluru to start a midday meal programme for school children.
Credits ET Realty