INVESTMENT STRATEGY

INVESTMENT FOCUS

iLabs Group aims to harness new opportunities and grow them into successful companies. Our investment philosophy is centered around 3 key themes:

  1. India’s emerging proficiency in technology and applied-science
  2. New categories of consumers driven by evolving consumption patterns
  3. New business models (b2b/b2c/c2c) driven by the boost in adoption of technology

While our office is based out of Hyderabad, we source, invest and build on opportunities from across India. As an investment strategy, although we are sector opportunistic, we only undertake investments for which we have domain knowledge and expertise such as technology and technology enabled ventures; consumer products; health and wellness; media and entertainment; education and skills-development; engineering and manufacturing; corporate and industrial parks. As an investor, we target promising seed-stage, early-stage and growth-stage investments, along with re-structures and buy-outs.

Moreover, we invest in asset-light business models, which have a traction, along with the potential for growth. iLabs Group generally commits capital between USD 1 to 30 million, for an ownership stake between 10 to 50 percent. Our investments are long-term and are aimed to maximize corporate and stakeholder value by not only providing capital, but also strategic counsel.

INVESTMENT CRITERIA

Our investment criteria is broadly guided by the following principles:

  • Category Leaders - We believe that rapid urbanization, increase in disposable and discretionary income, increase in consumer spend, rise of women in workforce and boost in adoption of technology will lead to the creation of new categories of consumption. We aim to partner with such ‘category leaders’.
  • Asset Light Models - We prefer asset-light models with low fixed-costs, as these models offer the best risk-adjusted return in a rapidly evolving market. We do not invest in asset-heavy sectors such as construction, mines, transportation etc.
  • Potential for Growth - We look for products and services, which have traction, along with the potential for expansion. We then analyze the market trends, competitor landscape and supply-chain conditions to determine the long-term prospects of value-creation for such products and services.
  • Credible Management - We wish to work with management teams, who are honest, transparent and have a credible track record. The management team should be open to external ideas, discussions and debates.
  • Entrepreneur Spirit - We wish to work with passionate entrepreneurs, who are intelligent, hard-working and have hunger for performance. We take pride in mentoring such entrepreneurs into future leaders.
  • Active Partnership - We are active stakeholders and partners to our invested companies. This involves continuously conducting performance reviews, as well as providing strategic counsel.
  • High Return of Capital - We look for companies which have a consistently high return on capital, along with strong financial statements and ratios.  Return on capital is a very good indicator of the performance of the management team, the competitive advantage of the organization and the efficient/effective utilization of capital.
  • Favorable Risk-Reward Ratio - We believe that the risk-to-reward ratio of every transaction should be in favor of the investment. We evaluate this by taking a realistic view on return and by considering all potential risks taken to capture the return. In fact, risk considerations include both exit and alternate investment options. 

INVESTMENT PROCESS

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