Michael Jones, a former chief executive of MySpace, one of the earliest social networking sites, is launching a venture capital fund in India to back early start-ups focussed on building mobile phone applications.
Rs.190 crore fund Mr. Jones is setting up a $30 million (Rs.190 crore) fund through his new company Science Inc., the Los Angeles-based start-up incubator and investment firm backed by Google Executive Chairman EricSchmidt’s Tomorrow Ventures. It will be called the Science India fund.
“It is not a typical ‘spray and pray’ angel fund model,” said Mr. Jones, chief executive of Science Inc, whose portfolio includes Dollar Shave Club, an online retailer for razor blades, and DogVacay, a marketplace where pet owners can find qualified local caregivers. “Unlike other funds where they put out a block of money and leave the entrepreneur on their own, we partner hand in hand,” he said. The decision to invest in the mobile space, he said, was because India is going through the fastest transition of people who weren’t connected with the computer but are now substantially connected with phones. “I think it is a unique moment. The ground is fertile.”
Mr. Jones is in the process of raising the fund and will close it in a few months.
India will overtake the United States to become world’s second largest smart phone market with over 200 million users by next year, according to research firm eMarketer.
The Science India fund would be led by Umakant Soni, a former top executive at information technology company Wipro, who also ran his own artificial intelligence start-up Vimagino. He struck a deal to set up the fund with Mr. Jones during an IIT Kanpur start-up event in January in Bengaluru.
Mr. Soni, Director at Science India, said, “If you are an entrepreneur, you probably spend two to three years just learning how to do business and today you don’t have that time and bandwidth.” That is where, he said, “Science would play a role of building an idea into a product and bring in design, development, sales, marketing and distribution.”
Mr. Soni said, fund size is $30 million and will close at $10 million (Rs. 63 crore). He also said that it is expected to operate in a few months once the fund confirms an anchor investor in India.
Even before the India Fund has been rolled out, Mr. Jones’ firm is backing Shabaz Ahmed, a fresh graduate from the M.S. Ramaiah Institute of Technology, who is working to commercialise a mobile application that he had developed during a hackathon this year. Mr. Ahmed’s app, called Simply, allows people to monitor their spending on prepaid mobile connections, call pattern and fraud. It is already in the market.
Mr. Jones, who spends a lot of time in India these days, was responsible for the relaunch of MySpace after it was overtaken by Facebook. This included pivoting the product from its legacy as a social network to a social entertainment destination, and then selling the business to SpecificMedia on behalf of NewsCorp.
“Many of the highly disruptive mobile businesses are not going to come from Silicon Valley,” said Mr. Jones, whose firm has also backed CoinDesk, a news site specialising in bitcoin and digital currencies. In his personal capacity, he has been an early-stage investor in over 30 start-ups, including Klout, Betterworks and LunchMoney.
Published - July 17, 2015 12:26 am IST
