India’s startup leaders turn into angel investors

An increasing number of entrepreneurs in India are acting as angel investors for new companies.

India’s recent emergence as a major economic power has been accompanied by the success of a number of exciting startups that are now worth billions. But the entrepreneurs behind these firms are now using their success to give a boost to younger businesses and talent.

According to a report from the Times of India, many of India’s entrepreneural business leaders are now becoming angel investors to give high-potential startups additional funding and support.

It says that although the first batch of entrepreneur angels in India were seen when people like Sanjeev Bikhchandani, founder of Naukri.com, took their firms public, many of the leading angels of the current breed are also still busy with the every operations of their own organisations.

So Sachin and Binny Bansal are still running Flipkart, but they are also investing in sites like TouchTalent.com and Giveter.com. Naveen Tewari of InMobi runs his own company while backing Tushky.com and Mettl, and has even found time to set up a separate angel fund called Lets Venture.

Snapdeal, Kunal Bahl and Rohit Bansal, Myntra’s Mukesh Bansal and Dhiraj Rajaram of Mu Sigma are also investing in new firms while managing their own.

The drip-down of funds, as well as advice and other forms of support, is an important means of developing new businesses and eventually forming an Indian ecosystem that nurtures fresh ideas and talent.

It makes sense for the youngest businesses in particular. It can be difficult to convince a bank to advance a loan for a riskier prospect, whereas angel investors, who have already taken the risk of setting up on their own, may be more willing to take the plunge.

For entrepreneurs who are willing to give up some stake in their own firm, it can be a valuable way of accessing finance while gaining a very important adviser. The Times of India also says that for the investors, it’s a great way of keeping their own ears to the ground.

“It’s not about deploying money alone but about knowing what new ideas people are coming up with,” Mukesh Bansal told the source.

Russell Investments is about to be acquired by the London Stock Exchange for $2.7 billion.

The London Stock Exchange Group has finally agreed to acquire Russell Investments in a huge $2.7 billion (£1.59 billion) deal, subject to shareholder and regulatory approval.

On 26 June, the exchange said it was planning to carry out the major deal with assistance from a $1.6 billion rights issue as part of a plan to break into the huge US capital markets, taking over Russell from life insurer Northwestern Mutual.

It was confirmed last month that the London Stock Exchange was interested in pursuing the deal, but it had to fight out competition from New York-based rival MSCI.

Now, Europe’s oldest independent exchange is set to complete the biggest deal in its 200-year history, which will help to solidify its position in a marketplace where consolidation is becoming much more widespread.

Indeed, it will become the third-biggest exchange-traded fund (ETF) index provider in the world, behind only S&P Dow Jones and MSCI. It would also be the second-biggest organisation in US-listed ETFs and hold benchmarked assets worth a massive $9.2 billion.

“The directors believe the acquisition is a rare opportunity to acquire a high-quality US business with a leading global brand providing index and investment management services,” said London Stock Exchange Group in a statement.

Russell is already well-known in the US for benchmarks such as the Russell 2000 and has a reputation as a leading index compiler and asset manager.

So the London Stock Exchange Group’s takeover deal demonstrates how firms are seeking to take advantage of the richest data, analytics and index-based products to inform their trading decisions.

Specialist indices and data targeted at specific markets are now in higher demand than ever. Interestingly, the exchange may now have the opportunity to increase its offering even further if it chooses to merge the company with FTSE International, which it owns outright.

According to Reuters, after a merger with Canadian TMX group failed in 2011 there were concerns that the London Stock Exchange Group itself could be taken over. After cementing its place in the market with the Russell deal, that threat is likely to remain at bay.