Anshu Prashar, partner at Whiteboard Capital, told ET that the firm has already returned 1x profits to investors and has around 6x unrealised gains from its first fund after investing a total of $10 million in around 45 startups. The first fund achieved partial or full exits from eight startups.
The firm’s second fund was due to close in December 2023, but this development had not been previously reported.
Unlike other venture capital firms, Whiteboard Capital differentiates itself by combining the roles of incubator and early-stage fund, seconding its operations team to portfolio companies for months at a time to work in areas such as operations, data analytics and technology.
ET had reported on August 14 that Whiteboard is one of the incubators for a sports and athleisure brand launched by retired Indian cricketer Sachin Tendulkar and former Swiggy Instamart head Kartik Gurumurthy. The company adopted a similar incubation approach for Apna Club, a B2B wholesale platform for consumer goods.
Fund II, which has already begun investing funds, has several family offices and domestic institutional investors participating as limited partners (LPs), and plans to invest in approximately 50 companies, mainly through additional investments within the existing portfolio.
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READ ALSO | VCs flock to deal market on fast commerce and D2C success “In Fund II, 30-35% of our deployable capital will go towards new cheques and about double that will go towards follow-on investments in (existing) companies…One thing that I think in Fund I, we could have written more follow-on cheques to portfolio companies. But we couldn’t because we didn’t have enough capital. So we had to be more cautious about making follow-on investments,” Prasher told ET.
The strategy is in line with a broader trend of early-stage investors raising larger capital to focus on follow-on investments to gain deeper involvement in portfolio companies.
Whiteboard Capital was founded by Sandeep Tandon, co-founder of mobile recharge platform Freecharge, and Kunal Shah, founder of Cred. As the name suggests, Whiteboard Capital reflects the company’s philosophy of investing in founders and helping them refine their products even before their business plans are fully formed. This strategy allows Whiteboard to invest at low valuations. Most of the investments have been made when startups are less than two months old or have not yet been incorporated.
When Whiteboard received its alternative investment fund (AIF) clearance from the Securities and Exchange Board of India (SEBI) in 2017, Shah ended his involvement with Whiteboard Capital, left the firm and joined Sequoia as an adviser. After Shah’s departure, Tandon brought on Prasher, a former early investor at Innoven Capital and Therma Capital, as a partner.
Currently, approximately 40% of Whiteboard Capital’s investment capital is invested in the consumer sector, which includes both consumer brands and consumer technology, with the remaining 30-35% of the portfolio allocated to financial services companies.
The firm categorizes its portfolio investments into two types: core and non-core companies. For the second fund, core companies are defined as companies in which the firm has at least 7.5% ownership and in which it has invested at least $200,000.
“We will see more exits in the $400-750 million range in India and potentially some in the $3-5 billion range. That’s why we’re consciously sticking to our strategy of getting in at a very early stage and betting on founders or taking chances,” Prasher said.
Discussing the influx of tech venture capitalists into the consumer space, Prasher said that it’s a tailwind for portfolio companies, helping them gain more traction and attract additional investment as they get closer to product-market fit.
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