Continuing the ongoing trend of team members in multinational VCs opening up their own ventures, Sequoia India’s Chief Marketing Officer Raja Ganapathy resigned his position to start an unconventional VC – Spring Marketing Capital – as a co-founder.
Ganapathy partnered with revered advertisement professionals Arun Iyer, ex-Chairman of Lowe Lintas and Vineet Gupta, ex-group chief executive of DDB Mudra, to start the venture. It will offer capital plus consultancy to early-stage startups.
The aim of the new VC will be investing in relatively newer technology startups and the consultancy will look after helping their founders in the marketing and branding activities.
So far, the VC already has seven consultancy assignments including BYJU’s, Healthkart etc.
The fund has a target corpus of $30 million, which it plans to invest across five to seven startups every year under ticket sizes ranging from $1-2 million. The VC does not plan on taking leads, instead, it claims to prefer participating in rounds led by other VCs.
The time period for which the VC plans to commit the investment is two-to-three years, after which is likely to liquidate its stake at the next opportunity.
Ganapathy and troop have already received commitments from several investors and are at the advanced stage in finalising LLPs. The VC is expected to close $20 million by June 2019.
The inclusion of consultancy services in the mechanism of the VC is a well-thought move by Ganapathy as research suggests that more than 40 per cent of the funding amount is spent on marketing.
Leveraging the extensive knowledge and experience of Iyer and Gupta, Ganapathy plans on supervising (may or may not be a part of execution) the advertising and marketing plans of portfolio companies and ensure the best use of those 40 per cent funds.
Overall, even when Spring Marketing Capital might not be the first venture that is started by an ex-VC member, it would be a product of market innovation, making it one of its kind. It remains to be seen how this model fairs for Ganapathy, Iyer, and Gupta in the future.
This development was first reported by ET.