Piper Serica Angel Fund

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About Piper Serica

Piper Serica is a boutique asset management company founded in 2004. It manages 450 crores in a SEBI registered PMS, 150 crores in FSC Mauritius registered Piper Serica India Numero Uno Fund, an offshore fund based in Mauritius. Both these entities invest in stocks listed in India. Piper Serica Angel Fund, a 100 crore SEBI registered AIF investing in high growth start-ups is another unique offering managed by Piper Serica. Collectively the AMC manages 700 crores in assets that are growing rapidly. 

Piper Serica has delivered a 17.6% post expense CAGR over 8 years in its public market investment against 9.1% by NIFTY 50 Index for the same period. The AMC has also delivered a 73% post expense IRR over 7 years for the startup investment that were made in the management teams proprietary accounts.

ABOUT THE FOUNDING TEAM

  • The company was founded by Abhay Agarwal. Prior to starting Piper Serica, Abhay worked as a Director with the Private Equity group of JP Morgan in India, HK and Singapore (1997-2004). He invested in companies in India, Korea, Australia, Singapore, China, and the US. He has managed more than $1 BN in assets
  • Rajni Agarwal is the co-founder and heads research for Piper Serica. Prior to Piper Serica, Rajni worked with SBI Fund Management where she oversaw more than $500 MN in assets. She then served as a Fund Manager at one of the largest debt schemes at SBI Mutual Fund.
  • Ajay completed B.Tech from Pune University, is a CFA and also holds a certificate in Investment Research & Analysis from CISI Institute, London. Ajay has been a part of Piper Serica for 8 years. Prior to this, he worked at KPO for Thomson Reuters. At Thomson Reuters, Ajay was a part of a team which managed more than $700 mil for 2 of the world’s largest global asset managers.

EQUITY ALLOCATION OF HNIS IN INDIA VS DEVELOPED MARKETS

EQUITY ALLOCATION ACROSS MOST HNI PORTFOLIOS

  • International Equities: 5%
  • Public Listed Equities: 60%

EQUITY ALLOCATION OF DEVELOPED MARKET HNIs AND FAMILY OFFICES

  • Public Equities: 40%
  • Private/Start-up Portfolio: 15%
  • Other global equities: 10%

What are the key success factors in angel investing?

  • Quality of deal flow
  • Ability to quickly scan the deals for probability of success
  • Investing along with other experienced investors
  • Staying invested for a long period of time
  • Spreading the risk over a portfolio of 30–50 investments
  • Providing help and support to portfolio companies

INTRODUCING PIPER SERICA ANGEL FUND

  • SEBI registered Category 1 AIF (Angel Fund).
  • Target to invest in 30 to 40 early stage startups over a period of 2 to 3 years
  • Minimum investment – INR 25 lakhs (to be invested over 2 years).
  • The funds target is to generate an IRR of 25% to 35% over 10 years. Target 10X return.
  • Using Yoda.AI an AI-based tool that predicts the probability of success of startups
  • Piper Serica & its founders have been investing in startups over the last 7 years.
  • Created a portfolio of 50+ companies. Current IRR at 73% for this portfolio

Investment Strategy of Piper Serica Angel Fund

  • They exclusively fund startups with exponentially growing business models.
  • They make investments in companies whose growth does not depend on ongoing money infusions.
  • They exclusively fund startups whose primary source of revenue is technology.
  • They make investments alongside other active investors who support and coach budding entrepreneurs.
  • To get the most out of profitable businesses, they want to maintain their investment in the portfolio firms for as long as feasible.
  • To diversify risk and lower mortality, the portfolio of the Piper Serica Angel Fund is intended to contain 30 to 40 enterprises.

INVESTMENT RESEARCH

  • Qualify companies that already have product-market fit, go to market and are revenue generating.
  • Filter companies only with a lead investor. A lead investor is someone who invests among the largest cheque size and also plays an active role in helping the company scale.
  • Filter on YODA.AI and calculate probability of success. Look for start-ups with more than 70% probability of success
  • Do detailed research on the business model, customer diligence, product diligence, industry experts input etc.
  • Build a diversified portfolio of companies with already existing revenue, and ability to become profitable fast.

The Journey Upto November 2023

The Piper Serica Angel Fund has surpassed the total fund. They expected to raise INR 100 Cr with a Green Shoe Option to raise INR 25 Cr. The Angel Fund got oversubscribed, and Piper Serica have closed the fund at INR 160 Cr. As of October 31, 2023, they have invested in 12 startups, and they expect to close investments in 4 more startups by end of November 2023.

Developments in the portfolio startups –

  • One of the portfolio startup has grown rapidly and is in advanced discussion to raise the next round of funding at a significantly higher valuation.
  • One of the portfolio startup became a part of the Forbes Dglobalist 200 Select Companies.
  • Highlighted in the following slides are the Quarterly updates on the 12 portfolio startups –

About The Fund Manager

Abhay Agarwal: Founder, Fund manager, Piper Serica

Abhay is the company’s founder and fund manager and has 28 years of financial experience (www.piperserica.com). Piper Serica was founded in 2004. It is a PMS manager registered with SEBI and an adviser to the Piper Serica India Numero Uno Fund, an FPI with Mauritius as its domicile. These two organisations invest stock in Indian businesses.

Before starting Piper Serica, Abhay worked as a Director for JP Morgan’s Private Equity group in Singapore, Hong Kong, and India (1997-2004). He invested in companies in the US, Australia, China, Singapore, Korea, India, and Singapore. He has invested in several businesses, including HDFC Bank, Piramal Glass, Jubilant Foodworks, Nicholas Piramal (acquired by Abbott), Bharat Forge, MTR Foods (acquired by Orkla), Mando Machinery Korea, Marico, and HDFC Securities.

Abhay worked for Citibank India from 1993 until 1997. He led a direct investment programme at the bank that closed many great projects. Sydenham College in Bombay awarded Abhay a B.com degree in 1991, and the Jamnalal Bajaj School of Management awarded him an MBA in 1992. (1993).

EXPERIENCE OF THE INVESTMENT MANAGER

  • More than 2000 early-stage deals evaluated over last 10 years.
  • Almost 50 live investments.
  • 73% IRR since inception from exits and current valuation of portfolio companies based on last round valuations for proprietary investments made since 2016
  • Very low mortality rate of portfolio companies. Most companies have raised further rounds at higher valuations.
  • Developed Yoda.Ai™ as a unique and proprietary predictive tool. The tool significantly reduces human bias and leads to very objective decision-making.
  • Very strong presence in the start-up ecosystem. This provides access to high quality deal flow.

COMMITTED DEALS - NEW INVESTORS CAN PARTICIPATE

  • Leading profitable edutech platform
  • Leading profitable overseas student accommodation platform 
  • Leading cybersecurity startup
  • Alt Mobility (Top up round)

Why Choose Piper Serica Angel Fund?

  • The investment managers have years of expertise funding start-ups and turning them into very profitable businesses.
  • As they collaborate with a wide range of ecosystem players, including other angel investors, funds, syndicates, and accelerators, they have exceptional access to transaction flow.
  • Yoda.ai, an automated forecasting tool created by Piper Serica, forecasts the likelihood that a start-up will succeed. With the aid of this instrument, we can concentrate on excellent prospects.
  • Piper Serica can provide fledgling start-ups access to clients because to its solid partnerships with big listed corporations.

Investment Process

  • Qualify companies that already have product-market fit, go to market and are revenue generating.
  • Filter companies only with a lead investor. A lead investor is someone who invests among the largest cheque size and also plays an active role in helping the company scale.
  • Filter on YODA.AI and calculate probability of success. Look for start-ups with more than 70% probability of success
  • Do detailed research on the business model, customer diligence, product diligence, industry experts input etc.
  • Build a diversified portfolio of companies with already existing revenue, and ability to become profitable fast.

EXIT STRATEGY

EXIT happens:

  • When the company gets sold to a strategic buyer or investor OR
  • When the company does large up-rounds (say 10X or 20X or more) OR
  • When a company does an IPO and gets listed

VC funds don’t re-invest exit proceeds. All exit capital is returned to the investor.

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Disclaimer: Investing Involves Risk. This document is for information purposes only and should not be viewed as a legal offering document or solicitation. Offers to invest in this fund are made only by the Discretionary Portfolio Management Services Agreement. Past performance does not guarantee future results and there is no assurance that the managed accounts will necessarily achieve their objectives. We do not guarantee any returns in the hand of investors not we take any sort of accountability for the performance of the scheme. The above-mentioned data is collected from the respected Fund house please verify the same at SEBI website.