UP Funds is expected to invest $100,000 in every startup, and make around 20 investments in a year
Upekkha, a global SaaS startup accelerator, has announced the launch of ‘UP Funds’ — a $2.5Mn per year rolling venture fund, enlisted on the AngelList platform. Upekkha will deploy this newly-curated fund into a number of SaaS startups under its Accelerator Program that have already built a SaaS Flywheel (established a sustainable revenue model and operating capital-efficiently).
UP Funds expects to invest around $100,000 in each startup, with around 20 investments annually. Unlike traditional investment models, the UP Funds’ model is designed to increase optionalities for SaaS startup founders by allowing them to choose to return (invested) capital through their own recurring business profits, by taking part in strategic exits, or by going public. It is inspired by the innovative model pioneered by investment firms Indie.vc, TinySeed, and Earnest Capital (all of these firms have invested extensively in B2B SaaS startups).
On the other hand, from the investors’ perspective, UP Funds is like an SIP or EMI for venture capital investors (known as Limited Partners or LPs). LPs who decide to be a part of UP Funds can invest a minimum of $10,000 per quarter to start with, and also change the amount every quarter. This allows Upekkha to deploy capital faster than in a traditional funding model and at the same time, it offers investors the flexibility to contribute on a quarterly subscription model basis, instead of making a colossal investment upfront. Simply put, this is a win-win model for both entrepreneurs (startup founders) and investors (LPs).
Mr. Prasanna K, Managing Partner, Upekkha says, “Bootstrapping vs. funding is a false dichotomy; SaaS startups need the right model of capital at the right time. While our Accelerator is already helping founders build a revenue flywheel to earn more than a dollar of recurring profit from less than a dollar invested, UP Funds scales the flywheel with a pooled incremental fund that helps SaaS founders achieve freedom to choose their own success paths by building recurring profits with low capital investments.”
Notably, founders working with Upekkha burn less than 15-20% of their equity to get to their first $1 million in ARR, in contrast to 30-40% without Upekkha.
“As a SaaS entrepreneur and angel investor, I am delighted to see how the UP Funds model provides utmost control and choices for founders while building a flywheel with the high margin recurring revenue model,” says Pallav Nadhani, an LP in the fund, and Founder of Charts.com (bootstrapped and sold to Fusioncharts previously).
“At Minjar, we were able to grow quickly and profitably with very little outside capital. With B2B SaaS growing rapidly, I think the best serial entrepreneurs would want to work with Upekkha to get support from their world-class accelerator, and further get access to capital that helps them to keep the best options for their business open,” says Vijay Rayapati another LP in the fund, and GM Nutanix (sold Minjar to Nutanix back in 2018).
SaaS startups play an instrumental role in global digital transformation. Even as Covid raged in 2020, and stocks in several sectors tanked, the B2B SaaS sector witnessed a meteoric rise, with Zoom, Docusign, Workday, Adobe, all growing revenues multifold between January and December 2020. Many of these fast growing B2B businesses are led by founding teams and execs of Indian origin. According to data from Crunchbase, the number of SaaS startups in this category is growing over 25% year-on-year.
Upekkha is a digital-first global SaaS Accelerator, eying the prospects of the above-mentioned digital transformation and helping startups founded by Indian-origin entrepreneurs’ grow exponentially and mark their global footprints. Since its inception in 2017, Upekkha has helped over 60 SaaS startups design their business flywheel to operational profitability. Over one-third of the startups under Upekkha’s Accelerator Program are currently growing at over fifty percent year-on-year, despite Covid.
For more information about UP Funds, visit: Up Funds | AngelList Venture
Upekkha’s official website: https://upekkha.io/