Exclusive: Sequoia, Lightspeed and Matrix putting $10 Mn seed fund in EkAnek

Influencer marketing has gradually been gaining grounds in India as brands started seeing it as a medium to reach and engage millennials. The new marketing tool comprising of celebrities and the rising class of micro-influencers has been leveraged by many lifestyles, fashion and FMCG brands to target consumers/users more effectively.

In spite of the growing demand for influencers and appetite for them from brands, startups working in the nascent segment haven’t seen any institutional (venture capital) backing. However, this is not the case anymore.

Sequoia Capital, Lightspeed and Matrix Partners are putting in $10 million seed round in EkAnek Networks, said two sources aware with the transaction. “The deal materialised last month at an estimated valuation of $25 million,” said the sources on condition of anonymity.

As per the latest RoC filings of the company with Ministry of Corporate Affairs, approximately $5.7 million (Rs 40.14 crore) has already been committed. In a Board Resolution passed a day ago, the company is issuing 4 equity shares and 60,480 Series A CCPS both at a price of Rs 6,637.7 each.

Lightspeed is co-leading the tranche with 21,883 CCPS and 1 equity share worth Rs 14.53 crore altogether. Sequoia investing through two of its entities is also pouring in the same amount via 2 equity and 21,881 CCPS, effectively taking the lead along with Lightspeed.

Matrix is another major investor pouring in Rs 9.68 crore via 14,859 CCPS and 1 equity share. A slew of Angel investors including Bhavin Kothari, Srini Gopalan, Rajan Anandan, and Anandakrishnan Chandrasekaran have invested a total of Rs 1.06 crore. The remaining amount was contributed by QED Innovation Labs and Crimsn Holdings.

Led by Kartik Sheth and Chandranshu - EkAnek focuses on building the ecosystem for new age brands in lifestyle categories through creating influencer networks, commerce platforms, and other support infrastructure.

Responding to Entrackr’s queries, Sheth had said that it’s not true. Nevertheless, EkAnek’s overview on LinkedIn mentions, “We are well funded by three top-tier Venture Capital firms and have a runway for the next 2-3 years.”

Sources indicate that the company has been working with a handful of clients at the moment. “Besides creating content and connecting influencers, it’s also building a platform where brands can sell with the integration of all required services,” added one of the above sources.

The remaining $4.3 million would be followed in another tranche primarily from the three VCs, added sources.

Previously, Kartik had led innovations at Airtel which included the nationwide launch of 4G and content apps such as Wynk Music and Airtel TV. Chandranshu had extensively worked with startups including OfBusiness, Lime Labs, Trilogy Consulting and several others.

Queries sent to Sequoia Capital for confirmation didn’t elicit an immediate response while Lightspeed declined to offer any comment. Matrix couldn’t be reached out for a comment immediately.

Over the past 12-18 months, firms choose influencer-marketing for better reach, engagement, and storytelling. According to a study conducted by Gurugram-based influencer-marketing firm Buzzoka, most companies spent between 5 to 7 per cent of their overall marketing budgets on online influencers.

Several startups like EkAnek also cropped up to tap the opportunity in the nascent but promising space. At present, OneImpression, Buzzoka, and Letsinfluence seem to be prominent influencer marketing firms. The aforementioned firms essentially act as a marketplace and persuade influencers on the brand’s behest.

Although influencer marketing has just started to gather some steam in India, it’s immensely popular in China and the West. Last year, Chinese influencer marketing sector was estimated to be worth about $18 billion. Influencers in China aren’t called influencers but Key Opinion Leaders or Wanghongs.

Ruhan Ecommerce and Mogu are leaders in China while Mavrck and Zorka.mobi are major influencing marketing platforms in the US and Russia respectively.