What is MNS?
Movers and Shakers Holdings (“MNS Holdings” or “MNS”, or the “Holding”) is a company registered under the Companies Act of Nepal, 2063. This holding structure includes a portfolio of Small-to-Medium Enterprises (SMEs)1 that co-exist under the MNS brand, forming an ecosystem of technology-enabled companies and entrepreneurs.
MNS portfolio companies benefit from shared infrastructure and corporate services that lie at the core of MNS’s venture building activities. Operational aspects such as human resources and talent management, financial and legal services, and facilities are centrally managed. In addition to facilitating strategy and prudent financial management, MNS’s Finance function also exercises oversight of the holding company’s equity interests.
An Investment Committee that is comprised of the Chairman of MNS Holdings, the Chief Investment Officer (also the VP of Finance), and Founder/CEOs of individual MNS companies is responsible for booking new deals and portfolio management. This body’s remit extends to achieving synergy targets across the portfolio, exit planning, and ensuring capital adequacy at the level of the holding company. The investment and venture-building aspects of MNS leverage the same set of shared corporate services; this results in a mutually reinforcing environment where case-specific approaches to enabling SME growth are possible. The Chairman of MNS, in consultation with Investment Committee members decides the best-fit growth model for each portfolio company
What Are Our Goals?Our overarching goals are to:
Become the number one,commercially-oriented venture builder and scale-up investment platform in Nepal;
Contribute to Nepal’s technology-enabled ecosystem by helping fill knowledge, funding and networking gaps across different stages of the funding continuum; and
Generate outsized impact relative to capital spend.
How do we go to market?
MNS Holdings is a unique early stage platform that is designed to overcome the challenges of operating in a relatively small and nascent ecosystem that is Nepal. Our funding structure and legal form reflects an operating reality where liquidity events are rare and the regulatory framework on alternative investment classes (i.e. PE funds, VC funds, Hedge funds, etc.) are in their infancy.
Based on lessons learned from other early stage ecosystems, growing literature on the relevance of funding models beyond Silicon-valley-style “2 and 20” funds3, and the deal flow dynamics in Nepal, MNS is conceived with the following attributes:
As a local entity investing in local talent, we understand the
inherent limitations to closed-ended funding vehicles with multiple
Limited Partners and often, structured exits that are negotiated at
the point of entry. We are sensitive to the potential harm that “too
much capital chasing too few deals” can inflict on a nascent
ecosystem like Nepal. Our permanent capital form enables MNS to
participate in the best deals that the market can offer, irrespective of
sector, ticket-size, or stage, and without the added pressure of timed
“We are a permanent capital model with a build/buy, hold, grow, and harvest mindset.”
We pride ourselves on conceiving solutions to seemingly intractable challenges, finding the right leaders, and then adequately incentivizing these individuals to execute ideas. We invest significant time and resources in the highest-caliber and most motivated individuals who can flip ideas into actions, and actions into high-growth businesses. MNS provides the shared resources, synergistic value-add, and infrastructure that is required to incubate our ventures into sustainable and eventually, high-growth businesses.“Transforming brilliant ideas into viable businesses is what we do best.”
Our ecosystem has a disproportionate number of brick-and-mortar SMEs that are unable to scale beyond a point. MNS is uniquely positioned to help these entities through a combination of capital and in-kind resource injections that address short-to-medium term funding, knowledge and network needs. In addition to value-added shared services, the MNS platform also includes several “core digital assets”4 that through an ecosystem effect, can accelerate the transformation of traditional SMEs into technology-infused, digitally enabled assets.“Our shared corporate services provide unparalleled value to distressed and high-growth SMEs.”
Active Portfolio Management
Beyond our shared services and digitization capabilities, MNS goes
the extra mile to ensure the injection of the right expertise at the
right point in time for each of our portfolio companies. Our
portfolio is sector and stage-agnostic5, and by definition, requires
different sets of expertise and subject-matter know-how. MNS takes
a hands-on portfolio management approach by in-sourcing the
most relevant expertise to address knowledge gaps among our
Founder/CEOs and their teams. We are fast becoming the most
credible source of deal flow6 for later-stage fund managers that are
investing in Nepal.
“A hands-on, cradle-to-grave approach on every portfolio position is what sets us apart.”
Fund Management (Future)
We are considering the merits of raising and managing an external
pool of capital to double down on the best assets in our portfolio
(and also to take additional positions). The experience that MNS has
collected from building its own ventures will be a critical
differentiator in our approach to fund management. The model by
which these external funds would be deployed would resemble a
co-investment platform that calls capital on a deal-by-deal basis - a
practice that is common in Nepal given prevailing regulatory and
compliance requirements. Third party validation would be a
precondition to every follow-on deal involving one of our portfolio
“We are confident that MNS sees nearly every deal in this market.”
How do we operate?
We are an eclectic group of Founder/CEOs and team members with a shared purpose: to disrupt the status quo and help solve problems using digital means. We are passionate about growing Nepal’s digital economy and building technology-enabled businesses that are sustainable and scalable; i.e. businesses that generate immediate value in our market and potentially, beyond.
We are supported by a world-class team of professionals and mentors who bring a wealth of experience from local and international settings. Last but not least, because of MNS’s strong brand, our companies attract the best talent available in the Nepali market. We are in essence, the employer of choice for aspiring entrepreneurs and ecosystem enablers.
I. Leadership and Governance
MNS Holdings consists of a two-tiered leadership structure that is supported by a core team of corporate professionals. At the top of this structure is the Founder and Group CEO of MNS Holdings, Mr. Sambhav Sirohiya,
who holds ultimate responsibility for setting the strategic vision, mission and direction of the company, on a portfolio basis. In this role, the Group CEO along with fellow CEOs of individual portfolio companies together opine discussions at the holding level and drive day-to-day operations at the company level.
The second tier of leadership rests at the level of each portfolio company. Here, individual CEOs are responsible for interpreting and executing strategy that is cascaded down from the holding level. By design, company CEOs have high degrees of managerial discretion and autonomy reflecting both the nature of the stake that MNS has in each company and also the leadership style of the CEO of MNS Holdings.
Both the Group CEO and company CEOs are supported by Venture Partner(s) and Entrepreneurs-in-Residence whose roles are to help build partnerships, source deals, and perform deep-dives into portfolio company operations with the ultimate objective of accelerating growth across the entire portfolio. The Venture Partner(s) are also responsible for coverage from a relationship standpoint and work closely with the CEO on strategic initiatives including positioning of MNS Holdings in line with external market trends and developments.
II. Investment and Portfolio Committee
The MNS Holdings Investment and Portfolio Committee (IC) holds primary responsibility over the Group’s investment and portfolio processes, including:
- providing investment teams with guidance throughout a given project’s investment cycle;
- assisting the Chief Investment Officer (and/or the deal team/originator) assess the potential value of a specific target within the context of the MNS portfolio;
- delivering investment, exit and portfolio decisions; and
- being accountable for overall performance of the MNS portfolio.
A key role that the IC performs at the onset of any deal is to validate the investment thesis in terms of synergistic value creation and fit within the overall portfolio. The IC serves as a decision-support layer that tests the alignment of proposed deals along every step of the investment process.
The IC is chaired by the CEO of MNS Holdings and consists of the following members: (i) the Chief Investment and Portfolio Officer of MNS Holdings; (ii) partner-CEOs and shareholders from across the MNS portfolio; (iii) MNS Venture Partner(s); and (iv) deal-specific subject matter experts on an as-needed basis. The Chair and partner-CEOs are voting members of the IC.
III. Common Infrastructure
A feature in the Nepali ecosystem that is unique to MNS is the shared physical infrastructure that it provides its portfolio companies. MNS Towers is an iconic landmark in Kathmandu with over 25k sq. ft. of space that is dedicated to hosting the MNS group of companies; this building is also home to digital nomads and aspiring entrepreneurs who through Innovation Hive (an MNS portfolio company), rent office space in the building.
MNS Towers is an integral part of Nepal’s startup ecosystem and is actively involved in helping promote local entrepreneurship. The location is home to a series of events - interaction programs, talks, training, etc. - that are aligned broadly with the notion of ecosystem building.
All utilities, security, parking, high speed internet, etc. are centrally managed in MNS Towers, creating a plug-and-play environment for individuals and businesses to focus on their core work agenda.
What is our portfolio construct and exit strategy?
MNS invests at different stages along the funding continuum, using different tools at its disposal. It is a unique investment platform with patient capital, an early stage incubator and accelerator (i.e. “Udhyami” and “MNS Next”) and the capacity (and know-how) to take later-stage bets. Typically, later-stage investments are distressed and/or discounted assets with high synergistic potential vis-a-vis the existing MNS portfolio.
Depending on prevailing conditions and tools used to invest, the MNS portfolio is divisible into the following groupings, each with its own underlying constituents: (i) core assets and (ii) investment assets; or : (i) built ventures; (ii) scale-ups; and (iii) “sand-box” assets.
The first grouping consisting of core digital assets and investment assets aligns best with the venture building model; the second grouping with new assets, scale-ups and “sand-box” deals best fits the scale-up paradigm. MNS operates in both paradigmatic constructs.
MNS as a Venture Builder
This view of the portfolio includes companies that MNS invests in to grow and those that it already has stakes in, that are specialized in specific digital domains. The latter group of companies offers a high-value proposition to the former group in terms of digital upskilling and related value-additive aspects. Companies that are non “core assets” are investees that exhibit clear synergies with those that are.
VMAG; Uptrendly; Orange; NEXT Venture Corp; Udhyami Innovations.
MNS Events; Foodmario; Sroth Code; Eton; Omaago; Innovation Hive; Himalayan Essence
Under this lens, MNS Holdings is akin to the sector-agnostic business models in other parts of the world (e.g. Silvertree Holdings, Polymath Ventures, etc.) wherein the portfolio is built from the bottom up and aggregated - i.e. synergies and teams are assessed and investments made as early as pre-MVP (minimum viable product). This approach holds an invest-build-hold-exit mantra over a time horizon that is atypical in developed venture markets; businesses at the point of exit are post-revenue and in most cases will be EBITDA-positive.
MNS as a Scale-up Platform
This lens on MNS divides the portfolio along three segments with disproportionate weight on scale-ups8. The other two segments amount to no more than 20-30% in terms of investment outlays (at cost) and constitute bets on exceptional founders/teams with early stage (i.e. pre-revenue) ideas or emerging business models that MNS strategically targets to learn and establish a foothold in.
Omaago; Innovation Hive; VMAG; NEXT Venture Corp.;
MNS Events; Foodmario; Orange; Udhyami Innovations; Uptrendly
Himalayan Essence; Eton.
This view of the business positions MNS in a more traditional role, much like a General Partner on a VC/PE fund. Emphasis is on slightly later stage companies (whether distressed or discounted) that can scale rapidly toward EBITDA positive territory and with high exit potential over the shortest possible duration.
Ultimately, MNS’s medium-to-long term objective is to exit select positions, realize returns, and recycle a portion of the capital in-flow to take new positions. Irrespective of whether one takes a view of MNS as a scale-up platform or a venture builder, the most obvious path to exits - either full or partial - is from later stage PE/VC funds with desired (or mandated) exposure to the Nepali market. Trade sales, private placements, buyouts, and partnerships are also distinct possibilities but the prospect of a liquidity event such as a public listing is more distant given Nepal’s capital market dynamics.
MNS is strategically placed within the “valley of death” in Nepal’s SME funding continuum - i.e. at the stage where initial checks from Angel investors, accelerators and early seed investors is close to depleted but several steps short of the annual run rates that would be attractive to later stage PE/VC funds. (Banks, by regulation, can only engage in asset-backed debt financing). A current-state assessment of the Nepali startup ecosystem points to a respectable presence of investors at the $5-15k and $350-500k segments of the funding continuum but in-between these ticket sizes, MNS is almost certainly the only entity that is actively investing.
From this perspective MNS is uniquely positioned as a feeder entity and provider of high quality deal flow for later stage entities in Nepal’s PE/VC ecosystem. MNS can curate, qualify, and de-risk the best deals in this market for follow-on funding from more traditionally structured capital vehicles with mandates to invest in high-growth SMEs, in Nepal. With more and larger-sized funds coming on-line, and the improved regulatory environment for alternative investment classes, the need for qualified deal flow is certain to grow as is MNS’s potential to meet this demand.
What is a typical deal cycle?
A project cycle can take anywhere between 15 to 60 business days depending on a number of deal-specific and related idiosyncrasies but will always undergo a standardized deal evaluation and decision-making process. These aspects of the MNS business along with sources of the investment pipeline (and its composition) are covered in this section. In brief, MNS, owing to its unique structure and position in the ecosystem has near complete visibility into local deal flow and can cherry pick the best investments this market has to offer. In parallel, the MNS reputation and brand has significant gravitational pull for the best and brightest entrepreneurs, giving MNS the ability bet on high potential individuals and ideas along different stages of their evolution.
At any given point in time, there are approximately 3-5 qualified deals that are floating around in the high potential pipeline, with 2x these numbers on MNS’s radar. Given the nascency of this ecosystem, approximately 2/3rd of the total deals that MNS sees are very early stage ideas that are high risk from an investment standpoint and as a consequence, where selectivity is commensurately high. At this phase, only one of every 15 deals on average will funnel into MNS’s offical investment process.
MNS’s deal pipeline is fed by several sources. First, NEXT Venture Corp. and Udhyami Innovations, which are assets in which MNS Holdings is invested, are early stage acceleration and incubation platforms, respectively. These entities along with others that operate in the Nepali market (e.g. One to Watch / Enterprise, Antraprerana, Communitaire, etc.) directly or indirectly contribute to MNS’s pipeline. In addition, the MNS pipeline is also fed by direct requests from Founders to meet with the Group CEO and/or senior members of the MNS family. These requests surface organically because of our brand, reputation, and expansive network.
Finally, the MNS pipeline is also supplemented by distressed assets that are identified through established networks and market know-how. It is not uncommon to identify at least one such potential deal in the market every 30-45 days. These are companies that offer outsized synergistic value with respect to MNS’s core strengths, are experiencing varying degrees of management and/or financial distress, and with signs of sufficient turnaround potential.The MNS deal pipeline and portfolio is a balanced aggregate of positions from across these multiple sources.
Investment Review Criteria
In addition to a standard list of investment worthiness aspects, each deal is evaluated across a spectrum of sector and transaction-specific criteria. Different weights are assigned to criteria based on the stage in a company’s evolution - e.g. product-market-fit is paramount at later stages whereas founder characteristics and team dynamics are more relevant during seed rounds.
A lot of time is dedicated to evaluating Founders and their team dynamics. Given the stage at which MNS invests and other ecosystem attributes, great care is taken to identify the most dynamic individuals alongside the most capable and cohesive teams. MNS looks for signs of dissonance and expects Founder/Partners to be well-versed in conflict resolution. Disagreement among Founders is statistically the number one reason why early stage of companies fail so MNS looks for tell-tale signs of poor listening skills, lack of coach-ability, and inability to remain composed in stressful situations. At MNS, we acknowledge that the outcome of early stage investments is disproportionately related to solid Founder and Team attributes. For this reason, significant weightage in decision-making is assigned to locating the right individual and building the right team because winning combinations almost always find ways to succeed.
In addition to a thorough evaluation of individual capabilities and team dynamics, MNS takes critical stock of a Founder’s track record in executing ideas and growing businesses. We consider failure a badge of honor as long as the underlying explanation of mitigating factors and circumstances are clearly articulated. We prefer investing in entrepreneurs who have experienced failure - such individuals are relatively better versed in peripheral vision, are better able to anticipate pitfalls, and can execute smart pivots before risks turn into adverse events.
If it’s unclear to us within the first minute of a conversation what specific problem a company (or idea) is setting out to address, we will pass on the opportunity. We require clear line of sight into hyper-local, real-world problems and creative solution-sets that resonate with our own sense of what is lacking and what (even if remotely) is possible. We exercise the same rigor and diligence when evaluating internally originated business ideas to establish potential product-market-fit. Our ecosystem is young so where investment criteria are concerned, MNS places disproportionate emphasis on assessments of an idea’s eventual bank-ability.
Our focus at MNS is less on discounted cash flows, multiples and sum of the parts and more on break-even and cohort analyses. We want to see evidence of different types of experiments and impact on a product’s unit economics. If our assessment aligns with the numbers that a business has realized along its journey, and we see an opportunity to build on that early success by leveraging aspects of the MNS portfolio, the likelihood of an investment will be high. This analysis, in combination with a sense of valuation derived from more traditional methods is applied to later stage businesses (distressed assets, plateaued businesses) to assess fit with the MNS portfolio.
MNS Investment Process
Our investment process consists of three main phases:
1. First look
All business proposals classified as high-probability pipeline deals receive a “first look” comprising a combination of desk research, market intelligence, and unofficial feedback from across the MNS network (internal and external). Founder/CEOs are occasionally invited to Investment Committee meetings to pitch their businesses. Based on these inputs, the Corporate Team, often in combination with one or more portfolio CEOs will take a call on whether to progress the deal to the Concept stage. An internal Sponsor for the deal is identified and she/he in close collaboration with the VP of Finance (and Chief Investment Officer) will chaperon the deal through the remaining steps of the investment process.
At this phase of the process, elements that were assessed during the “first look” will be refined, information gaps (mostly) addressed, and an investment thesis will be articulated. Preparation for this stage will almost certainly entail several informal interactions with company founders and teams to validate understanding and better assess capabilities and potential. The output of this process is an Investment Concept Note that will be officially discussed at an MNS Investment Committee meeting. The IC will deliberate and based on the merits of the deal, decide whether or not to progress it further.
3. IC Review
At this stage in the investment process, concept notes will be further fleshed out, questions from the concept stage investigated, the investment thesis refined, and an investment review book will be authored detailing the target company’s financial position and projections, team strengths and weaknesses, fit with the MNS portfolio, etc. On the basis of these elements and IC discussion, a decision will be made in line with published IC policy guidelines to either invest in or reject the proposed deal. The Chair of the IC has veto on all IC decisions.
At the culmination of the investment process, if a project is “green lighted”, it is a deal that has funneled through multiple layers of scrutiny, assessments, check and balances. This is a deliberate and disciplined approach that every single entity in the MNS portfolio has been subjected to. This process also forms the basis for future portfolio reporting, including the identification of and agreement on business and financial KPIs, and associated targets.