â€œWe are seeing a lot of interest in participating in the India story, both from what opportunities are being catered within the local market and the emerging category of entrepreneurs from India who are creating global companies,â€ Dinesh Katiyar, Partner, Accel told CNBC-TV18.
“We are seeing a lot of interest in participating in the India story, both from what opportunities are being catered within the local market and the emerging category of entrepreneurs from India who are creating global companies,” said Dinesh Katiyar, Partner, Accel.
In an interview with CNBC-TV18, the group of entrepreneurs said that Prime Minister’s Digital India has potential for investment from large companies and at the same time, it is a great opportunity for smaller companies to grow.
Tarun Agarwal, Co-Founder at ThinkApps said start-up opportunities in the country are tremendous. Big venture capital funds are looking at India with great interest today, he added.
Agreeing to the sentiment, Srinivasan Seshadri, Founder, Zettata said companies in India are young and willing to experiment, which makes investment easier.
Increasing size of global market and growing customer base in India are the other catalyst driving the growth story.
Below is interview transcript.
Q: The big concern that investors like yourself have been raising in the valley is that they would rather invest in the valley given the fact that India is still tough when it comes when it comes to regulatory norms, while it is easy to attract inflows, it is difficult to exit. Would you agree to that?
Katiyar: We are obviously seeing a big improvement in that situation. So, we are clearly seeing a lot of energy at the grass-roots level where a lot more entrepreneurs willing to go after all kinds of problems whether they are domestic opportunities or global ones.
We are seeing a lot of interest in participating in the India story, both from what opportunities are being catered within the local market and the emerging category of entrepreneurs from India who are creating global companies.
We are obviously hopeful that the regulatory environments sort of hurdles that make it a bit harder for companies get to the right exit points will get eliminated over time. We are clearly seeing that optimism being shared with our investors as well.
Q: So, you would say that gradually the exit hurdles are becoming easier. Are you increasing your investment in India?
Katiyar: Absolutely, if you look at the size of our funds that we are investing in India, we have been growing for every subsequent fund has been larger. If we look at our peer groups, the amount of money that is now being put into the venture capital asset group in India has been growing a lot.
Again, all of that is tied up to this thesis that we will see exit opportunities. We are beginning to see domestic mergers and acquisitions (M&A) picking up. Clearly, right now, it is being driven by companies like Flipkart, Ola and several others, but that starts creating some liquidity within the system. It keeps promoting Angel investments; it keeps getting more entrepreneurs into the fold.
Q: You have started a company which essentially does search but even better. So, how do you create differentiated products and let me understand, you have of course set your base in Silicon Valley, where does the India market stand for you? As a start-up, do you believe that it is easier to invest, to begin in Silicon Valley than in India?
Seshadri: I think the Indian market is an important market for us. Primarily, because the companies are much younger and they are much more willing to experiment and so for a high technology company like us, it is a fertile proving ground. And that is how it has panned out so far. Clearly, the size of the market is something that is growing day-by-day, so that is why we are sort of speaking to the global market right now.
Q: In supply chain management, there are several hurdles with respect to clearance that you would face in India. You have a presence in Bangalore as well. But you are based out of Silicon Valley. Is it easier to work out of the Silicon Valley than in India? Would you say that Prime Minister Modi’s efforts to create a Silicon Valley within India are more difficult and it could be just a dream?
Ayyangar: The US is a great place to start companies and have a worldwide perspective. However, India is huge market for us in terms of consumers demanding brand goods and as well as Indian merchants wanting to sell abroad. Indians think cross-border from day-one.
So, we are happy to serve them and make delivery very simple. All the hassles you talked about, we flatten it and we are a virtual delivery company that works with partners to make it as simple as an application programming interface (API).
Q: Let me ask you about the kind of hurdles that you have faced. Securities and Exchange Board of India (SEBI) has kind of tried to clear up the kind of norms with respect to startup listing but do you believe that encouraging investment, convincing investors of your entrepreneurship skills, your business plan is tougher in India and do you feel that investors don’t take as much risk?
Garg: Firstly, I think convincing investors into the India story and growth story has become significantly different in 2014 and 2015 thanks to Narendra Modi’s effort as well to promote the country in several parts of the world.
For us, we started this year and we have been able to raise funds and we continue to see momentum that people have a lot stronger belief in what is possible in India, what Indian entrepreneurs can do in India and what Indian entrepreneurs can basically build global companies out of India. So, we truly believe in that and that is how we started and we are now starting to look at growing in Silicon Valley.
Q: This is what National Association of Software and Services Companies (NASSCOM) was saying that even the startups that do build in India they prefer working out of Silicon Valley. Is that the case in your case?
Garg: Yes or no I would say. So, we have lot of our technology and operations based out of India. We also have customers in India using our products, but when you are looking at customers targeted in Silicon Valley you have to build a post here. So, for a reason if you need to be closer to your customer, you need to build it.
Q: A lot is required with respect to Digital India and Prime Minister is trying to encourage startups in Silicon Valley. From a ThinkApps point of view, do you believe that there are ways in which startups here in the Silicon Valley can aid the government in their efforts to encourage Digital India?
Agarwal: India happens to be unique position where Mobile is leapfrogging previous technologies especially Desktop-First kind of world. For India, China becomes an interesting model in terms of what kind of services can become digitalised.
To that extent while used cases might come in from various parts of the world but in terms of scaling things at a level where hundreds of millions of people using these services, make companies here have their experience in serving global audiences.
We have seen Google expressing quite a bit of enthusiasm. Sundar Pichai yesterday talked about supporting Modi’s vision. So there is definitely potential for larger companies to support that vision as well as smaller companies to take advantage of that opportunity.
Q: Do you believe that it is easier to invest in Silicon Valley than in India or to startup in Silicon Valley than in India?
Agarwal: I think Silicon Valley has a longer history in terms of startup environment ecosystem investment history but today for entrepreneurs it is a continuous chase opportunity. Right now opportunity in India is huge.
Investors are also convinced about that and investors are optimistic people. So his is a huge opportunity for them. So, at this moment all big venture capital funds are looking at India and many of them are actively investing as well.
Get Lok Sabha 2019 Live Election Results, constituency-wise tally, news, views and analysis
Follow our Lok Sabha Election Result Live Blog here.