This Gurugram Startup Digitizes the Investment Management Workflow for Investors, Venture Capital Funds and Family Offices
After making record investments in 2021 – nearly $24.1 billion (a report by Nasscom and Zinnov) poured into India’s startup ecosystem – it would be unfair not to discuss the innovations brought to investment firms.
Venture capital (VC) firms are no strangers to digitalization. Their interaction with technology is limited to their back-office operations, including administrative and accounting tasks, maintenance of spreadsheets, logging of scans, business valuation and monitoring. For this, they partner with technical support providers and pay them for the software.
However, only a few options are available for front-office tasks such as sales, portfolio management, customer service operations, or middle-office operations including risk management and business strategy.
founded by Anup Kumar Adlakha and Ankur Agarwal in 2013, solves this problem.
The Gurugram-headquartered company provides end-to-end solutions for private equity and venture capital firms, from portfolio tracking to investor management, fundraising to deal flow, administration of funds to investment management, etc.
Previously, Anup and Ankur worked at Actis, a UK-based private equity (PE) firmwhere they noticed a gap in the market: the technology solutions available for this space only cater to back-office needs, including fund and account administration.
“Technology solutions in the alternative investment space are either not end-to-end or very large in terms of cost, ease of setup and ease of use,” Ankur said. Your story.
With a direct understanding of these pain points, the duo decided to solve the problem on their own. Initially, PE Front Office was supposed to cater to all private equity firms and their technology needs.
Gradually it moved into venture capital (VC) firms, real estate and debt funds, distressed debt funds, funds of funds and family offices.
Addressing portfolio companies and investors
Over the past 10 years, the startup realized that venture capitalists had different workflows, albeit similar investment strategies.
Usually, a venture capital firm takes funds from investors to invest in companies that eventually become part of their portfolio. However, the process of deciding where to invest is not straightforward.
Investors, who give their money to private equity, venture capital or angel funds, expect higher returns than other asset classes due to the high risk associated.
So, before investing, these companies must research, analyze, deliberate and monitor industry and company performance. They research many offers, decide what is promising and do their due diligence on these companies.
They need customizable offerings for monitoring, management, and communication. Ankur says the startup had to develop a solution – about 80-90% could be used as is, and the 10-20% gap was taken into account.
Although investing for a few years, these venture capitalists must regularly monitor the financial health of their portfolio companies, their investment returns, etc. They also research potential investors, follow their investment strategies, share documents and manage their relationships with them.
PE Front Office’s software enables these businesses to do all of this through its customer relationship management offering, which also generates analytics and reports.
Ankur says the startup made sure to remove bottlenecks related to cost, availability, and customer type. PE Front Office has also worked to reduce the implementation cycle and can be live with any customer in less than 10 days.
Moreover, it has added plugins with Gmail and Outlook to facilitate communication using the software, making it easier for customers.
Journey and way to go
PE Front Office, a Software-as-a-Solution (SaaS) startup, charges its clients (venture capitalists) based on the number of users.
“Our customers don’t have a huge in-house technology or IT team to run their system. They don’t want to have to manage the system by getting backups,” says Ankur.
Additionally, PE Front Office offers its solution on an open-source framework, removing the need for long-term commitment and technology licensing. “It has helped us become cost competitive, and as a SaaS startup, we operate a pay per use model,” notes Ankur.
Offered on the cloud, users can access it on their desktop computer and Android and iOS apps.
PE Front Office, which has more than 40 employees, serves more than 100 customers in 15 countries, including the United States, Canada, United Kingdom, Singapore, Hong Kong and India. Its clients include Chiratae Ventures, Fireside Ventures, Edelweiss, etc., which have made over 1,100 investments using its software.
Next, “We want to focus aggressively on the United States because we have a lot of customers there,” says Ankur.
Started with an initial capital of $250,000PE Front Office is aiming to hit $1.5 million in revenue in FY23. It has yet to raise funds.
According to Registrar of Companies (RoC) documents, in FY21, the startup reported revenue of Rs 3.35 crore, with a profit of Rs 22 lakh. Its FY22 financial statements are not yet available on the RoC portal.
The startup competes with companies like France-based efront and US-based Dynamo Software.