Mumbai-based business incubator Hatch (different from Chandigarh’s The Hatch), which focused on services-oriented startups, has shut down. The closure happened in May, according to an update on its still active Facebook page. The company’s website is no longer live.
Going by the Facebook update, the trigger for shutting down the outfit appears to be SEBI’s requirement for registered venture capital funds in India to have a minimum corpus of Rs 20 crore. “We don’t see the need to run a fund more than Rs 5 crore. So we are closing down the fund in India,” says the update, posted on May 14. Incidentally, the decision to shut down was taken prior to the release of SEBI’s recent guidelines that allow angel funds to launch in India with a Rs 10 crore corpus (instead of Rs 20 crore).
“We believe Rs 10 crore for idea stage funding is too big a fund to manage. Half of that is really what we wanted. We do not want to invest that kind of money in idea stage startups. Our idea was to invest anywhere between $50,000 and $100,000 across a few startups before taking the successful ones to early stage VCs. Also, the tax implications on the returns generated are still not very clear,” Hatch founder Sudarshan Narayan said in response to StartupCentral’s queries on the shutdown.
Since its launch in 2011, Hatch had incubated two companies. One of them is Mumbai-based clean-up services startup Hammer & Mop, which raised an undisclosed amount in seed funding from the incubator last October. Narayan says the incubator had identified three more companies for investment. “Hatch ex-partners will continue to be invested in one while exiting the other,” he said. Yesterday, Hammer & Mop founder Sushrut Munje told us that Hatch was stepping out of the company.
Meanwhile, the incubator’s founders, Narayan and KK Varma, are moving on to a new model that will focus on the Indo-US corridor. Moving away from their earlier focus, the founders will now focus on healthcare technologies, online education, mobile, consumer Internet, social and media startups. The new model/ outfit is expected to go live by the end of the year and the founders plan to set up a product development center either in Mysore or Bangalore.
Images credit: Hatch
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