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Singularity Growth Capital Fund

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Singularity Growth Capital Fund

Fund Snapshot

Target Fund Size: INR 600 crore
Number of Deals: 12-13
Ticket Size INR: 25 – 125 crore
Team Size: 4 seasoned PE professionals, supported by Advisory Board
Commitment Period: 30 months
Fund Term: 6 + 1 years
Registration: SEBI AIF
Target Sectors: Consumer, Financial Services, Healthcare, Mobility, B2B
Hurdle Rate: 10%
Target Gross IRR: 30%
Investment Caps: 15% for the single deal; 40% for a single sector
Minimum Investor Commitment: Rs 5 Cr
About Company –

Singularity is a private investment firm founded by Sam Darwish, the Founder, Executive Vice Chairman, and CEO of IHS Towers, one of Africa’s most well-known and successful entrepreneurs. We want to invest in and assist innovative entrepreneurs and teams who are shaping the future via disruptive technology, media, and telecoms enterprises. Our emphasis is on these companies’ early and growing stages, when we can add significant strategic value to them by using our network and knowledge to help them scale. We are always eager to speak with businesses who share our enthusiasm for making a difference. Please reach out to one of our experts to see if we are the best fit for you and your team.

The vision of Singularity Growth

To be the premier provider of technology-driven firms with growth finance and distinctive capital market access.

Unique Capital Market Advantage

  • India has the lowest percentage of IT companies in its entire market capitalization.
    • US ~40%
    • China ~22%
    • India <1%
  • However, India has a thriving startup environment, garnering $67 billion in private investments since 2012.
    • In 2019, VCs invested $12 billion in four areas: consumer technology, software/SaaS, fintech, and B2B commerce, compared to $15 billion in the Indian stock market by FIIs across sectors.
  • The average time it takes to become a unicorn has shrunk from 22 years (for firms founded before 2000) to 4 years (companies incorporated in 2016-21)
  • The time difference between succeeding rounds is rapidly closing.
  • Stock markets have recently reacted positively to technology-driven enterprises.
  • A number of venture-backed IT companies are planning to go public in FY 24 due to attractive valuations.
  • SEBI has also made a crucial step to make the listing procedure for start-ups easier.
  • Singularity is concentrating its efforts on developing a robust transaction pipeline of tech-driven businesses with promising capital market prospects.

Synergy-driven strategy

Singularity University will invest in 10-15 future leaders in Consumer and Business Technology, with big addressable markets and hence optimum capital market outcomes.

Focus on Series B to Series D 

  • For Series B and Series C, there is a large and increasing difference in domestic capital.
  • Over 50 funds investing in Series A have strong transaction flow in Series B and C.
  • Stages B-D provides the highest risk-adjusted returns since they are important inflexion points.
  • Because we invested in or worked with the founding teams of over 30 renowned India GPs, we have deep links to them.

Synergy-driven market approach

  • Instead of taking a competitive strategy, form partnerships with renowned PE and VC companies.
  • Due to unique solutions, we have two entrance points into selected firms.
  • Examining firms in the expansion stage with a good chance of succeeding in the capital markets
  • B2C and B2B, Products and Services, Software and Platforms will all be included in the portfolio.

Uniquely positioned team

    • Madhu Kela, a co-sponsor, is a legend in Indian asset management.
    • Yash Kela, a co-sponsor, has a track record of 6 years in venture capital.
    • Managing Partner has had a 90 percent departure rate in the past, with Rs 3,000 crores returned.
    • The only new team with excellent technology and growth capital expertise.

Specialized Investment Solution

Bridge Equity: Between Series B and C, or Series C and D, there is equity. Bridge equity is required by three out of every four businesses. Fresh rounds are time-consuming, hence internal rounds are favored. Better entrance valuation compared to a full round, and a smoother deal procedure owing to less competition.

Co-Investment: Support one or more lead investors; the company’s preferred fund is frequently short of $3-10 million, so they may co-lead the round. Because the firm does not require many backups, the round closes rapidly.

Partial Secondaries buyout: Obtaining a 3-10% investment from current investors Angel investors, seed investors, and other early-stage investors will be excluded. Part of the company was sold to a venture capital firm. Founders have little money to repay their loans. Compared to the principal component, the entry valuation is significantly higher.

Targeted Market

  • Insuretech platforms
  • Education loans and services platforms
  • Digital customer communications
  • Differentiated beauty and personal care
  • Women’s consumption on the internet
  • Enterprise software and services
  • Mobility related products and services
  • Health-tech platforms 
  • Gaming and gamification platforms
  • Financial services infrastructure

Investment Evaluation

Qualitative

  • Ability to become and stay in the top three players in the section; cannot be disrupted by larger players undercutting them.
  • Product of high quality; strong consumer interaction; digital maturity of more than three years
  • Stability / previous experience / core team equity stake
  • The primary investor’s quality; the founder’s relationship with significant investors; Alignment of investors and founders for a five-year exit
  • A core group of people who aren’t fond of squandering money

Quantitative

    • Good GM ( at least >40%); Good CM1 ( at least >20%)
    • Consumer: 1st year CM1 / CAC > 1x; Business: Strong B2B bus dev team and/or partners
    • Enough TAM for at least 3 players to grow at 40-50% CAGR for 5+ years, yet taken together <50% of the market
    • Strong recent growth rate; Visibility of 35%+ projected 5-year growth rate
    • A core group of people who aren’t fond of squandering money
    • Multiple; Possibility of raising a second round from a top-15 VC or international investor

About Fund Managers

20Mr. Madhusudan Kela

  • Mr. Madhusudan Kela is one of India’s most well-known and experienced stock market investors.
  • He has garnered several awards for his contributions to Indian stocks, including the Prime Minister of India’s Best Fund Manager award.
  • Madhu was the Chief Investment Strategist of Reliance Capital till 2017 and was essential in the company’s growth.
  • Between 2001 and 2017, they ran an asset management company. He also played a vital role in building strategic ties for Reliance Capital with global firms such as Nippon Life and Sumitomo Mitsui. 
  • RMF’s AUM increased from less than $200 million to over $1 billion in less than a decade under his supervision.
  • Reliance’s flagship plan outperformed the S&P BSE 100 benchmark with a CAGR of 28%, making it one of the most successful in Indian history.
  • Madhu quit Reliance Group to create MK Ventures, a private investment firm. Since 2017, he and his team have put in place a solid set of systems and a laser-like concentration on investment.
  • In April 2020, they established Invexa Capital LLP as a limited liability partnership to handle and advise external money from local and offshore investors.
  • Madhu earned her bachelor’s degree in commerce from Pt. Ravishankar Shukla University in Raipur and her master’s degree in management studies – finance from KJ Somaiya Institute of Management in New Delhi.

 

Apurva Patel

  • image 21 [1]Working in Private Equity, Investment Banking, Leveraged Finance, and Equity Research for 23 years at the age of 49. (India and U.S.)
  • 13 years of Private Equity experience at IDFC PE, Brevan Howard India, and ICICI Venture
  • M.B.A. from Duke University; Chartered Accountant (national rank)
  • Entrepreneur since 2018
  • Since 2005, INR 1,525 crore in invested capital has been managed as growth capital investment and/or exit for 14 enterprises.
  • Experience in a variety of fields, including healthcare, hospitality, education, and technology.
  • 13 expansion-stage enterprises have board or observer positions available.

 

Yash Kela

Prior to setting up Singularity Ventures, Mr. Yash Kela has been trained by shadowing pioneers across industries like housing finance, Commercial Vehicle Financing, Venture Capital, Consumer brands, and Organized Retail around Fashion and Home.
While at India bulls Housing finance, was a part of the Investment Committee, which was overseeing the 20,000 Cr loan books.
Created Singularity ventures into an LP/ GP book having 9 + fund investments and a direct investment book running at 60 % + IRR, from 2016 onwards.
Partnered with the leading GP early on in their fund journeys as a GP / early LP – Artha ventures (Micro VC), Sixth sense Ventures (Consumer).
Created Arrival, an integrated custom home interiors platform from scratch to 35 stores, delivering 1000 homes per year, Backed by marquee investors and having international and domestic partnerships with Leading Building material companies.
Yash has completed his B. Tech in ICT from Dhirubhai Ambani Institute of Information and Communication Technology, Gandhinagar, and holds a CFA charter

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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.