Auctus Cap hunts for ‘hidden gems’

“I can invest at any point in time in not more than eight companies and want to get involved at the board level or board advisory level in each of these investee companies,” Phadnis said in an interview. He said Auctus invests in a few startups, with Phadnis playing an active role in its growth as an adviser, council member or mentor to the founders of its portfolio companies.

“We believe in putting our time behind our money. So, we don’t believe in spray and pray philosophy,” he said, highlighting the company’s strategy to make focused investments.

Founded in December 2019, Auctus has funded seven startups—UniAcco, Disprz, Prozo, Speaking Tiger, AuctusESG, food and beverage chain Chai Point, and HomeGuru, from which it has already made an exit.

Cumulatively, Auctus’ investments are valued at around $5 million. The firm largely invests at the Series A stage and above with ticket sizes in the $500,000-2 million range, Phadnis said, adding that the firm also participates in follow-on investment rounds for some of its investee companies. The investment vehicle has also invested about $500,000-1.5 million each in various venture debt funds as a limited partner.

While all the investments have been made from his personal corpus, Phadnis said he has also made pool investments along with other high-net-worth individuals. “We are thinking of creating a fund structure where we invite capital from others,” he added.

“In principle, I am sector agnostic; I believe there are opportunities and hidden gems across sectors,” he said, explaining the investment vehicle’s sectors of focus.

“There are some very good companies in the creator economy (space). But (we are exploring) a couple of other sectors also. Consumer tech is something I have some very good opportunity that I’m looking at,” he added.

However, Phadnis pointed out that Auctus may not consider investing in some sectors, such as deeptech or infrastructure. Another key investment principle of the firm is its focus on tech-enabled businesses. “We want to back globally scalable companies which are tech-enabled and, of course, led by pedigreed founders,” he said.

Prior to Auctus, Phadnis co-founded EuroKids International Pvt. Ltd, a homegrown educational service provider in the pre-school and K-12 space, in 2001, along with Prajodh Rajan. He exited the pre-school chain in 2019 after global alternative investment firm KKR & Co. acquired a majority stake in the firm from a consortium of investors led by mid-market private equity firm Gaja Capital.