Contrarian Social Opportunities Fund- I

Contrarian Social Opportunities Fund I is a new early stage (Series A) investment fund, led by Somak Ghosh. Somak has been one of 3 professional Co-Founders of Yes Bank (www.yesbank.in) and was Group President – Corporate Finance and Development Banking. As of fiscal 2011, he was responsible for 70% of the Bank’s assets (USD 12bn) and over 50% of the Bank’s profits (USD 0.2bn). As a Co-Founder, he has been a key member of the Bank’s Executive Management, the Management Credit Committee and the Asset Liability Committee for over 8 years and emerged as an exceptional leader in building start-up businesses and taking them to scale.

The fund shall invest in early stage enterprises with investment size typically around USD 1 mn going up to USD 5mn progressively in 2-3 rounds. Target sectors include education, healthcare, housing, energy, livelihoods and agribusinesses – and within these, for-profit enterprises that seek to achieve superior financial returns by delivering core goods or services to stakeholders as producers or consumers.

Contrarian believes that businesses at this stage with a clearly demonstrated proof of concept and revenue visibility of more than USD 0.5mn, offer the right mix of rewards of early stage investing while mitigating the risks of angel/seed stage investing.

Financial description

Serve and Volley: Contrarian Capital borrows this terminology from tennis to indicate that Fund Manager has a rigorous and carefully selected process for investment, where in round 1 investments are made between USD 1-2mn, in tranches, as sole investor. Then basis proven scale-up this is followed up with a volley i.e. investment of another USD 2-3mn as lead co-investor or solo investor. Contrarian Capital believes that this approach offers Fund Manager multiple benefits, by using relatively smaller amounts of money to secure Fund's investment position, work with entrepreneurs to grow the business before committing more funding and finally, should Fund Manager be faced with some lemons, exit without large capital at risk.
The tenets of the strategy are a great serve-boldness and early movement-soft hands. What this means for us is rigorous selection at the first stage, a very high involvement with investees from the outset and the ability to be agile and flexible in terms of future investment. Given the unique risks and challenges of early stage investing we believe this provides the Fund Manager with the best possible portfolio management strategy.