India gets its first Fintech-focused Growth Capital Fund, Beams FinTech Fund
Mumbai: India gets its first-ever dedicated growth capital fintech fund, Beams FinTech Fund (Beams), which will invest in fintech companies operating at the confluence of financial services and technology space.
With a target size of $100 million & a greenshoe option, Beams proposes to invest $8 mn-$10 mn in growth stages, Series B & C rounds of Fintech companies led by high-quality founders. It plans to build a concentrated portfolio of a dozen Fintech companies in a market currently valued at $75 billion and is likely to touch $200+ billion by 2025.
Beams is being launched by India's first and largest integrated incubator, Venture Catalysts, that also has 9Unicorns, a $100 million early-stage sector-agnostic accelerator fund in its stable.
Beams is co-founded by Fintech veteran Sagar Agarvwal and Dr. Apoorva Ranjan Sharma, Anuj Golecha, Anil Jain, Gaurav Jain. Naveen Surya, Chairman of the Fintech Convergence Council and Founder of ItzCash (now EbixInc), has been roped in as the Fintech Expert Partner (non-executive) as part of the core founding team.
The founding team of Beams has an incredible experience of over 20 years of investing in & building 250+ companies including fintech & financial services companies, such as BharatPe, Dukaan, Flobiz, Esskay, Impact Guru, Suryoday, Centrum, OTO Capital, Klub, GetVantage, LenDenClub, LiquiLoans, and Junio.
With a founder-first approach, Beams has a focused strategy of offering founders with capital and ecosystem support to build large successful fintech companies. It would provide a network of local and international Banks, Insurance companies, NBFCs, Fintechs, Mentors & Advisors to not only access capital at affordable rates but also to expedite the go-to-market strategy of its portfolio companies in India & abroad. In addition, Beams would also provide access to VCATs 250+ portfolio companies & 195+ corporates for partnerships through Incubate Hub.
With the backing of Banks, NBFCs, Fintech’s, several influential fintech founders, family offices & UHNIs from Indian and Global investors, the founding team is already in advanced stages of its first close and making a couple of investments.
Emphasizing the opportunities in the Fintech sector, Sagar Agarvwal, Co-founder & Partner, Beams, said, "Fintech is consuming an increasingly larger slice of the software pie. We are in fintech 3.0 right now in India, with the first wave of lending and payments companies having received a significant amount of capital and now the capital is moving across segments. Seasoned professionals & high-quality founders are moving out from larger firms to target newer categories to solve the long tail financial services demand in India."
Sagar has around 15 years of private equity investing experience with Funds in Emerging markets - India, Middle East & Africa. Previously, he was a CIO & MD at Nimai Capital & Senior management & Investment Committee Member at Evolvence India. He has advised across 3 funds, $500 Mn of capital and 36 investments across various sectors including Consumer, Healthcare & Financial Services/Fintech space with several exits & liquidity events. He has been a Partner at Venture Catalysts for Fintech investments in India since 2019.
Beams Fintech Fund assumes significant importance as the Indian fintech market is growing fast with 2300+ Fintech startups currently operational, of which 24 are Unicorns and 15 are Soonicorns. Besides, the market is ripe for IPOs. At least five financial services & fintech firms, including Paytm, PolicyBazaar, FinoPayments Bank, AGS Transact, Star Health Insurance recently IPOed.
"We estimate that the maximum number of Unicorns in India will be from the Fintech space over the next decade," Sagar stated.
While globally, there are several Fintech Focused Growth funds such as A16Z, Ribbit Capital, Insight Partners, General Catalysts, QED, Apis Partners, there were none focussed only on India.
On the need for a fintech fund, Anuj Golecha, Co-founder & Partner, Beams, said "Fintech opportunity is huge in India as it is the only tech segment in India that has created over $75 Bn in value and $8 bn in M&As. Our returns in BharatPe are a testament to the opportunity in the Fintech space in India. We have given 90x return to investors from BharatPe exit which turned Unicorn last year and are creating more Unicorns in this space. We have one of the best Fintech investing teams in India with an excellent track record." Bharatpe is the fastest Fintech Unicorn in India.
Dr Apoorva Sharma, Co-Founder & Investment Committee Member, Beams, added, "We are a strong thesis-driven team of investors & COVID has further strengthened our thesis in the Fintech space. We expect nearly $200 bn of new value creation by existing and new Fintechs in India over the next 5-7 years. Beams will primarily focus on segments such as Embedded finance, Enterprise SAAS Products, Neo banks and Platforms catering to MSMEs."
"The need for capital, knowledge, and support required for Fintech's at growth stages is much different than at an early stage. Beams is well-positioned as the only 100% Fintech-focused growth-stage fund. Beams is an opportunity to back high-quality founders solving key problems for enterprises and consumers in the financial services space," said Navin Surya, Fintech Expert Partner, Beams. Navin built India's first digital wallet ItzCash and later sold it to US-based EbixInc for $130 mn.
India is the third-largest Fintech market globally after the US and China in terms of the number of startups & capital invested & the number of Unicorns. In 2021, 18 companies turned Unicorns in the Fintech space out of 43 total Unicorns in India - BharatPe, Digit, Cred, Meesho, Groww, Five Star Finance, Zeta, Chargebee.
