Morphosis Venture Capital Limited — an early-stage venture firm based out of Dubai International Financial Centre (DIFC) and licensed by the Dubai Financial Services Authority (DFSA) — is all set to launch its aptly called India-focused fund Alicorn next week.

Morphosis, an enabler of structural change, is laying the foundation blocks as an institution to reimagine the early-stage investing model with a strong focus on environmental, social, and governance (ESG) practices.

The firm invests in technology start-ups in large and rapidly digitising areas, such as b2b commerce, enterprise software and applications, fintech, healthtech, mobility tech, clean and climate tech, agritech, automation tech, among others.

“Our fund has a targeted corpus of $100 million (Dh367.3 million) and is focused on early-stage business-to-business, ESG-positive tech-based start-ups with a significant Indian connection and a compelling international appeal, with particular applicability to the Middle East, in addition to the large domestic opportunity in India,” said Amit Zutshi, founder and managing partner of Morphosis Venture Capital Limited that is focusing on stringent corporate governance norms.

Zutshi and his partners — Narayanan Muralidharan and Kartik Chandra, who are based in India — Investment Committee members and Independent Directors are experienced investors, unicorn builders and global business leaders with top-tier educational backgrounds from Indian Institute of Technology (IITs), Indian Institute of Management (IIMs), Cambridge University, Columbia University, London School of Economics (LSE), and Indian School of Business (ISB).

The soon-to-be-launched Alicorn has already made a start on investing. “Our experience and connectivity in the start-up ecosystem have allowed us to include two excellent investments in our India fund whose valuations have already more than doubled,” said Zutshi, who brings over 25 years of experience in the UK, India and the Middle East in deal-making and value creation — all the way to launching an initial public offering (IPO).

Alicorn, which is in partnership discussions with large global corporations, financial institutions, system integrators and consulting firms, has generated enormous interest among start-up founders even before the launch.

“We have been looking at five pitches a day and expect that number to triple in the next couple of quarters. With a target of creating a highly selective portfolio of about 25 investments over three years, all our investment decisions have a very high threshold of conviction. We are putting our collective experiences into creating global powerhouses,” said Muralidharan, a seasoned venture capital investor who led the delivery of a 99 per cent annualised return from 21 companies over a five-year period in his previous stint.

Alicorn offers a phenomenal opportunity for Indian and UAE entrepreneurs and investors to work together.

“Indian tech start-ups are meaningfully disrupting how business is done and creating tremendous value in the process. The momentum is unprecedented. Morphosis is fortunate to be playing a small role in this transformation with the support of our Middle Eastern investors and global partners,” he added.

A good time to invest in venture capital

The Dh367.3-million corpus is targeted to be raised between November 2022 and June 2023 and invested over the next three years in Pre-Series and Series A funding for the chosen start-ups and can expect up to nine times return on investment (RoI).

Going by the global cues, financial markets are likely to bottom out in the next three to six months and then start recovering. This is a good time to invest in venture capital which has typically given investors approximately 10 per cent higher returns than the stock market in previous recoveries.

"We are investing in our 3/6 Acceleration Model and are building platforms and capabilities in-house to supercharge the growth of portfolio companies in India and internationally, especially in the Middle East. The UAE and the broader Middle East, with their individual and collective technology vision and robust digital infrastructure, is a major stepping stone for these startups before continuing their expansion trajectory in key markets across Europe and North America,” said Chandra.

Through the 3/6 Acceleration Model, start-ups will be provided all the help required to grow across six critical growth vectors and supported by a 100-member mentor and advisor network in India, the Middle East, the US and Singapore who are handsomely incentivised by Morphosis to create alignment for long-term success.

Shriprakash Pandey, founder and chief executive office of the global technology company Commtel Networks, who is one of the investors in Alicorn, weighed in on Morphosis as “a unique organisation”.

He said, “I am thrilled to seize the opportunity and partake in Morphosis’ focused ambition of being an enabler in the growing start-up ecosystem in India."

Bharat Poddar, senior Partner and global leader in Boston Consulting Group’s technology practice and also an Alicorn investor, told Khaleej Times from New York: "I have known Amit (Zutshi) for nearly 30 years. The combination of the Indian opportunity and how Morphosis is approaching this fund is very exciting. With Amit and his partners in the saddle, it is clear to me how Alicorn is geared up to produce supernormal returns."

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