Dear Investor,
The last few months have been dominated by a small two-letter abbreviation – AI. As a technological development, we are witnessing history being made with Artificial Intelligence dramatically altering our lives. And, just recently, we saw Prime Minister Narendra Modi referring to AI as America & India. Beyond the banter, however, lies global acknowledgement of India’s emergence as both a technology repository and a market opportunity. This was also highlighted by Prof. Mohanbir Sawhney of Kellogg Northwestern University in his exclusive keynote address to the over 150 attendees at our Investors’ Day in April. Our overview presentation at the event emphasised this aspect, and it is immensely gratifying to see how our nurturing of startup founders is leading to consistently improving performance – in our funds as well as in the portfolio companies.
Now in our 12th year as a pioneering early-stage VC fund, our investment thesis continues to be validated and reinforced. Indeed, the Sep ’22 CRISIL AIF Benchmarks report ranked our Fund II 4th among 29 peer funds, whereas Fund III was 3rd among 33 funds considered as a peer group. Our sharp focus on identifying technology-enabled enterprise startups with a global marketplace, and zero tolerance on compromises during and after an investment in a venture is ingrained in every member of the growing YourNest team. The dealflow team, which has India’s widest access to early-stage ventures, is actively looking at opportunities in SaaS, IoT, HealthTech and, of course, AI:
Contiinex, a recent Fund III investment is a private cloud speech AI platform with industry-trained LLM automated workflows that deliver 95% accuracy in transcriptions.
With incubators and accelerators countrywide actively seeking our participation and with leading co-investors accompanying us in our investment journeys, YourNest is at the forefront of the early-stage ecosystem. In the second half of FY23, two major LPs were onboarded: the LN Bangur Family Office and Max Life Insurance. With the induction of Mr Manoj Kohli (formerly with Softbank and Bharti Airtel) and Mr Amit Mehta of the LNB Group, our Fund III Advisory board was also strengthened.
We have also strengthened our thesis through the ‘funding winter’. While experiencing cash exit in the peak of the pandemic and an exuberant 2021, reality checks drove us to take firm and tough decisions. We replicated this recently in mellowing down valuation expectations while guiding our founders in raising rounds in 2023.
At an overall performance level, here are the highlights of the three funds*:
IRR (Net) | MoIC | DPI | TVPI | |
| Fund I | 15.35% | 3.58x | 1.47 | 3.23 |
| Fund II | 34.62% | 2.87x | 0.04 | 2.45 |
| Fund III | 26.61% | 1.57x | – | 1.25 |
*In INR as of March 31, 2023
India remains an attractive destination among global economies and is emerging as a viable manufacturing alternative to China: with increasing inflows of capital, an undiminishing entrepreneurial spirit and a robust startup environment, and complete governmental focus, I can assure you that your unstinted support infuses us with an even greater degree of responsibility. We look forward to sharing more good news during the course of this fiscal – both from an exit and investment perspective.
As I sign off, I would request you to follow us on Twitter and/or LinkedIn for more updates.
Sunil K. Goyal
Managing Director & Fund Manager
June 27, 2023