Social media major Facebook is actively looking for early-stage Indian startups for potential investment as it eyes a bigger share of the lucrative startup ecosystem in the country. The company’s previous investments in social commerce platform Meesho and edtech startup Unacademy have brought encouraging results since both joined the unicorn startup club in the country.
Facebook India’s managing director Ajit Mohan told the Times of India that the company is focused on backing innovative models that have the potential for growth not only in India, but can also be scaled up globally.
“We will continue to look for investment opportunities in early-stage startups,” he said, adding that the company’s search for investments is “sector agnostic” and it is open to explore younger startups across business verticals.
Facebook typically invests between $25 million and $50 million in an Indian startup, as per the report.
Facebook had last year launched the $100 million “Facebook Business Grant” for 30 countries including India. The company revealed that around $4 million were deployed to 3,000 Indian SMBs across the five cities, New Delhi, Gurgaon, Mumbai, Hyderabad, and Bengaluru for the companies impacted by the pandemic.
Facebook had in 2019 invested $25 million in Meesho, which was valued at $2.1 billion after its last funding round in April 2021. The social networking giant had participated in a $110 million investment round in edtech enterprise Unacademy, which was valued at $3.4 billion during its latest fund-raise this month.
The company, which is currently involved in a legal battle with the Indian government over the new IT rule, last week launched a ‘small business loans initiative’ for companies that are present on its platforms.
Under the India-only initiative, companies that are on Facebook’s platform can get quick access to credit or loans ranging from Rs 5 to Rs 50 lakh ($6,743-$67,435) across 200 cities in India
Facebook has partnered with Indifi, a lending platform, for loan disbursal.
“…there is no collateral required for the loan that comes with a pre-defined interest rate of 17-20% within five days. For women led-business, there is a 0.2% reduction in interest rate as well. The loans initiative is to address the challenge of access to credit faced by the small and medium enterprises (SMEs) in the country,” Mohan told Indian media.
The company expects other players to come on board and more capital to be available in the market. Mohan said that the social networking company’s self-interest here is to help the “small and medium business ecosystem grow massively, which in turn will also help the company as well.”