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50 hot startups 2017

VCs and startup CEOs join hands to launch Covid-19-focussed Grant

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In an effort to widen the pool, individual members are also believed to be reaching out to global funds for contributions.
New Delhi | Mumbai: In the time of social distancing, perhaps this can be termed as a gesture of social capitalism.

A number of top fund managers from blue-chip venture capital firms – including Sequoia Capital, Accel and Lightspeed Venture Partners — and prominent startup CEOs have joined hands to set up a Rs 100 crore grant that will back fledgling firms working on products and services to combat the Covid-19 pandemic.

The Action Covid Team (ACT) Grants, which is possibly a first-of-its-kind initiative globally, has already received about 40% of its target corpus, with some of the country’s top entrepreneurs also coming on board to not only provide capital, but also identify ventures that may be still at an ideation stage.

The entrepreneurs include Mukesh Bansal, founder of Curefit and Myntra; Abhiraj Bhal, cofounder of UrbanClap; Kunal Shah, founder of Cred and earlier FreeCharge; Freshworks’ Girish Mathrubootham, Moglix CEO Rahul Garg and Jaydeep Barman, co-founder of Rebel Foods, besides others, according to multiple sources with knowledge of the developments.

India, the world’s second-most populous country, which has been under a 21-day nationwide lockdown since March 25, has recorded over 1,100 active cases of Covid-19 infections and 32 deaths as of Tuesday, according to government data.

The domestic arm of global non-profit organisation, United Way Worldwide, will manage the grant, with plans to distribute the capital over the next quarter or earlier.

Nachiket Mor, India head of the Bill and Melinda Gates Foundation, is heading the leadership team for ACT Grants.

Other senior office bearers include Prashanth Prakash, founding partner of Accel India; Mohit Bhatnagar, managing director of Sequoia Capital and Vani Kola, founder of Kalaari Capital.

Accel Partners’ Shekhar Kirani and Matrix Partners’ Tarun Davda are part of ACT Grants’ prospecting team.

In an effort to widen the pool, individual members are also believed to be reaching out to global funds for contributions.

ACT Grants has also onboarded venture capital fund managers from Kalaari Capital, Orios Venture Partners, Chiratae Ventures and Matrix Partners.

Given that the financial support to startups will be in the form of grants ranging from Rs 25 lakh to Rs 1 crore, the investors will not pick up a stake in the selected ventures.

Emails sent to Sequoia Capital, Accel Partners, Kalaari Capital, Orios venture Partners and United Way Worldwide, seeking confirmation, did not elicit any response till the time of going to press.

The fund managers are committing capital from the fees they charge and the carry that they earn from managing their respective funds.

While they have committed Rs 1 crore to Rs 20 crore each, startup entrepreneurs have been asked to commit between Rs 5 lakh to Rs 1 crore each.

The grant will back ventures looking to provide Covid-19 scale testing, at-home disease management mental health support and procurement of prevention, protection and safety gear, among others.

The setting up of the ACT Grant programme is a stark departure from the way venture capital traditionally operates, which is generally perceived as primarily inward looking.

However, given the rapid spread of the pandemic, which has already claimed over 35,000 lives globally and sent global economies into freefall, the need to join hands has become imperative.

Several VC-backed startups have already initiated pandemic-centric initiatives, ranging from offering micro-insurance to industrial workers who are still working to produce essential items, to meals and healthcare check-ups and financial packages.
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