Seeding early-stage start-ups with crucial equity investments
by N. Ramakrishnan
“We have been associated with Venture Center since our incorporation. We have benefitted from the advice, guidance and mentorship they have given. We moved out of Venture Center long ago in the sense we are no longer physically present there, but our association continues. Venture Center made an investment in our company from the SEED Fund and then the LEAP Fund. I believe for both the SEED Fund and the LEAP Fund we were one of the earliest companies in India to get them,” says Dr. Renuka Diwan, Founder, BioPrime Agrisolutions. Both the SEED Fund and the LEAP Fund are BIRAC’s (Biotechnology Industry Research Assistance Council) funds.
With the SEED Funds, adds Dr. Diwan, the company was able to do market validation, putting the product out in larger quantities in different markets on different crops. A part of the money went into infrastructure development. BioPrime used the LEAP Fund money to scale up, in terms of increasing production capacity and for getting raw materials. “Both these funds came at extremely crucial and vital times,” says Dr. Diwan. When the company finalized its formulations, Covid struck and everything went under a lock down. That was when the second tranche of the LEAP Fund came in to the company. “We were able to survive in the market because of those funds. It would have been extremely difficult without the funds,” adds Dr. Diwan.
Incorporated in 2016, BioPrime is a Pune-based venture that is working on agri-biologicals. It is working on and discovering molecules and microbes that can help make crops climate resilient. Dr. Diwan has a Ph.D in plant biotechnology from the University of Pune, and her two co-founders – Dr. Shekhar Bosale and Dr. Amit Shinde – are also Ph.Ds from the University of Pune in Botany and Plant Sciences respectively.
BioPrime is one of the companies in which Venture Center has made equity investments in. Apart from incubating, mentoring and helping deep tech start-ups access various Government grants, Venture Center makes equity investments in select start-ups through different funds administered by it. These funds include the BIRAC SEED (Sustainable Entrepreneurship and Enterprise Development) Fund, BIRAC LEAP (Launching Entrepreneurial Driven Affordable Products) Fund, NIDHI SSS (National Initiative for Developing and Harnessing Innovations – Seed Support System), DST SSS, Lab2Mkt for companies formed out of research laboratories and incorporation/founders’ equity in companies where EDC (Entrepreneurship Development Center) is the co-founder. According to Ms. Shruti Devasthali, Head – Funding & Investment, Venture Center, the sweet spot for cheque sizes is between ₹30 lakhs and ₹60 lakhs and the stake Venture Center picks up depends on the stage at which it invests. Venture Center typically makes about six equity investments in a year.
According to Dr. Diwan, BioPrime got the equity investments in 2017-18 and 2019-20, in all about ₹1.30 crore. Since then, the company raised an undisclosed amount in equity from venture capital firm Omnivore, which invests in the agriculture technology sector, in December 2021. BioPrime is in the process of closing a top-up round from institutional investors. The fresh funds will be used to strengthen the team, increase market penetration, register its products in global markets and improve research and development on other products.
Mr. Tanuj Gigras, Co-Founder and CEO, Nayam Innovations, a Pune-based medical device start-up that is developing a novel intraocular lens to give spectacle-free vision to patients after cataract surgery, says the company has got equity funds from Venture Center and other investors. Nayam Innovations, he adds, was among the earliest biotech companies to get funding in the form of private capital, which it used to improve the prototype. With the equity funding in 2015 and then in 2017, which round also saw participation from a few individual investors, the company was able to develop the technology and demonstrate the manufacturing method, demonstrate how the technology works and make an intraocular lens. It then raised a small bridge round that helped it in pre-clinical studies and a larger round in 2021 that was used for clinical studies.
Nayam Innovations recently inaugurated a laboratory in Pune that will help it make intraocular lens for research and to conduct advanced polymer characterization. The company will shortly begin clinical trials, according to Mr. Gigras, who is a B.Tech and M.Tech in Engineering Physics from the Indian Institute of Technology Bombay and who founded Nayam in 2013 along with Prof. Julia Ann Kornfield, Professor of Chemical Engineering at Caltech, and Dr. Surendra Ponrathnam, scientist at National Chemical Laboratory.
Apart from grant funding, BatteryPool, which is based in Pune and is building battery swapping stations for electric vehicles, has raised equity investment from micro-VC 100x.vc, a seed round from Indian Angel Network and a second round of funding from NIDHI which is administered by Venture Center. The company, according to Mr. Ashwin Shankar, Founder and CEO, has raised about ₹3.5 crores ($500,000). The seed round helped BatteryPool scale the team from four to about 20 now. The money also went into product development, says Mr. Shankar, who has a Bachelor’s in Electrical Engineering from Purdue and a Master’s from Stanford. BatteryPool, according to him, plans to become a full stack solution provider for battery swapping and have around 100 stations by December. The company will look to raise a pre-Series A round of around $3 million, leading to larger Series A round next year.
PadCare Labs, which is into recycling of sanitary napkins and diapers, is yet another company that has raised equity funding from Venture Center through the SEED Fund, apart from getting BIRAC and other grants. According to Mr. Ajinkya Dhariya, Founder and CEO, PadCare Labs, the company used the seed funding to take the product from the laboratory to the market. It used the money for commercialization, customer acquisition, expanding the team, setting up a new facility, and for research and development. It is now in the process of closing a seed round investment which will be used to grow the business across the country and look at taking it abroad.
According to Mr. Dhariya, who has a mechanical engineering degree from Maharashtra University, the company can recycle about 100 kg a day of sanitary napkins and is looking to increase it to 500 kg a day. PadCare Labs has designed and developed the bins to collect the sanitary napkins and also the machinery to segregate the cellulose and plastic, which are then used for making various products such as plant pods, paver blocks, paper and packaging material. The company has designed sanitary napkin vending machines too. It has tied up with a number of companies to place its napkin bins and vending machines.
According to Dr. Ravindra Patel, Managing Director and CTO, OmniBRx Biotechnologies, an Ahmedabad-based venture that makes bio-reactors for vaccine manufacturing, the company got equity investment through the BIRAC LEAP Fund in 2018. The company was founded in 2016 and it commercially launched the product in late 2019. OmniBRx has got various grants, including the BIG (Biotech Ignition Grant) from BIRAC, which it used to validate the prototype. OmniBRx, according to Dr. Patel, who has an MSc in Biotechnology and a Ph.D in Bioprocess Engineering and has worked in the pharmaceutical industry, has more than 50 installations in India and a few abroad. Incubated at Venture Center, OmniBRx has set up its own 10,000 sq.ft. manufacturing facility in Ahmedabad and is talking to venture capital firms to raise funds for expanding the manufacturing facility and for overseas marketing.