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Family Office capital vital for international SME investment

As Family Offices look for new opportunities along the Silk Road, local expertise is more important than ever for investors.

Nayan Gala, co-founder of JPIN VCATS, discusses the relationship between Emerging Markets and Family Offices.

Internationally, Family Office capital is worth $5.9 trillion of investable assets, and the families behind them represent $9.4 trillion, according to Campdem Research. Perceived as catalysts for ever-expanding investment direction, these groups are now increasingly looking for international opportunities to expand their portfolio. JPIN VCATS have recently led global collaborations with Family Offices to invest in startups such as Chingari and Credit Enable, which is indicative of the direction that Family Offices are taking their capital; to emerging markets, and to the East. 

The cross-investment firm commissioned research to look into British investor sentiments, and found almost 14 million people (13,799,000), from normal people with an eye on the stock markets to ultra-high-net-worths, are looking to invest in emerging markets such as India. Incubators like JPIN lead investment into startups and SMEs in their localised geographies, so given the appetite of ultra-high-net-worths and wider investors to the emerging markets, established networks of localised experts who have their  ears to the ground as well as an international insight can naturally provide a guiding hand.

The potential among the 85% of the world’s population and 75% of GDP that resides in these markets is obvious, and these numbers are only going to grow in the coming years, in terms of quality or quantity. Countries like India not only have a massive consumer base as we all know, but also a well-educated workforce and have shown incredible growth in tech-centric markets such as FinTech and the pharmaceutical industries.

According to the Economic Times, India is the world’s third largest startup ecosystem, with 38 firms being valued at over $1 billion, known as unicorns. In 2020, the country minted around 12 such unicorns despite the disruption to the economy caused by the Covid-19 pandemic, and CB Insights estimated that four startups became Unicorns in the first week of April alone. India’s small business community is flourishing, and this will provide great opportunities for Family Offices looking for symbiotic relationships. Just 193 family offices made over 1700 venture capitalist deals in the subcontinent, showing the sheer volume of valuable opportunities to be found among 1.3 billion consumers.

India is closer to a continent than a single country, with countless religions, cultures, geographic and economic landscapes, and so searching out the wisdom of local experts can often be the difference between success and failure when trying to find these ambitious startups.

Nayan Gala, co-founder, discusses why startup incubators like JPIN VCATS will only become more important to guide investments in the coming years:

“Brexit seems to have caused a shift in global sentiment towards emerging markets, and particularly the Indo-Pacific region, with India at its heart. This can be seen by the British Government’s focus on seeking a Free Trade Agreement with India, and now by our data that shows just how many people want to invest along the Silk Road.

Ultra-high-net-worths can provide a make-or-break investment, if placed in the right company, the right idea, and at the right time, and so they can be incredibly important for ambitious startups. Inversely, Incubators like JPIN VCATS’ find the best and most ambitious startups looking to make it to Unicorn status, and so they can be of vital importance for investing Family Offices looking for new opportunities.

We have led partnerships with Family Offices to invest in brands like Chingari, the Indian TikTok disruptor, or CreditEnable, an AI-assisted investment tool, showing how great ideas need wealthy backers, and wealthy backers need a guiding hand to help them find that Unicorn-to-be.”

Written by Tenner Smith

Tenner Smith - I have experience in financial intelligence and automated intelligence. In industry I have worked on artificial intelligence and machine learning. Tenner Smith is a reporter at DF media.

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