The Unicorn Ascension Fund (UAF) is the first of its kind, and is a joint project of Ascension Ventures and Unicorn India Ventures. It expects to raise £2 million by July this year, and will begin deploying capital in autumn.
The UAF hopes to leverage the strengths of both markets – India’s economy is currently undergoing digitisation, which UK tech companies could seek to capitalise on.
How will it work
Enterprise Investment Schemes enable investors to spread the risk of investing in early stage businesses by offering a portfolio of ventures, as well as various tax reliefs.
The UAF will utilise these tax reliefs, and invest in scale-ups raising between £1m-3m at the pre-Series A stage. It will co-invest around a third of the round in six to eight deals per year.
Business development support will be available to the scale-ups in questions from the Ascension team in London, and the Unicorn team in India.
Nina Amin MBE, chair of the UAF Investment Committee, said: “UAF is the first cross border technology fund focusing on the UK-India corridor.
“The fund will unlock significant synergies between the high-tech products and services emerging out of the UK and the numerous opportunities arising from the significant digitisation that is underway in India.”
Doing business in India
According to the Department for International Trade, India has one of the fastest growing economies in the world. The UK is the third largest investor in India, and the potential market is large – in 2014, the UK exported £6.35 billion worth of goods and £2.24 billion worth of services to India.
The UK-India Tech Partnership, recently announced by the UK government during Prime Minister Narendra Modi’s visit for the Commonwealth Heads of State meeting, could also provide momentum for companies looking to scale in India.
Digital secretary Matt Hancock said: “Our world-leading digital economy is booming, worth more than £116 billion a year and employing more than two million people.
“We’re determined to see this incredible success continue, and this ambitious UK-India Tech Partnership will bring together some of the best minds working in tech to unlock its future potential and deliver high-skilled jobs and economic growth in both countries.”
Initially, the UK will invest £1 million to pilot the approach, which could potentially be raised by a further £13 million by 2022.