Investors are choosy about metrics: RTP Global’s Nishit Garg explains late stage funding slowdown

Nishit Garg

The early-stage funding activity in the seed and Series A rounds in the first half of 2025 is trending towards 2020 levels, said Nishit Garg, Asia partner at RTP Global, an early-stage venture capital investment firm.

The early 2020s were marked by exuberance and frenetic investments following the Covid pandemic lockdown that fuelled the growth of several digital commerce companies.

Garg said that many of these early-stage rounds are not immediately announced, suggesting a hidden dynamism that will likely surface over the next few months. "We see a good volume of quality companies, and the funding winter is way behind us when it comes to early-stage investment," he said.

The VC fund has invested in startups such as Cred, Slice, Classplus, Rebel Foods, MPL, InVideo and IBC among others in India.

While acknowledging a slowdown at Series B and C stages, Garg attributes this to high appreciation for metrics in today's market. “Unlike the exuberance of 2020-2021 when Series B and C were happening without metrics, investors are now very choosy, demanding clear product-market fit (PMF) and a demonstrable need for capital solely for scaling,” Garg added.

Started in 2000 as ru-Net Holdings Limited, the firm was rebranded as RTP Global in 2018. The VC firm has a total assets under management (AUM) of $4 billion and a $1 billion corpus to invest in startups across North America, Europe, India and Southeast Asia. A third of RTP Global’s investments is earmarked for India.

The absence of some global investment funds that heavily fueled the Series B and C market in previous years also contributes to this recalibration, Garg said, without naming specific funds. Tiger Global and Softbank were very active during this period, and the fear of missing out drove a lot of investments.

Globally, the firm has invested in over 150 startups including Yandex, Datadog and Delivery Hero. Founded by Leonid Boguslavsky, the firm has offices in New York, London and Bengaluru. The VC firm does not invest in Russia and has not received any capital from Russian institutions.

FOMO continues in AI and QC

Despite the overall conservatism in the funding environment, Garg identifies specific sectors where valuations continue to defy traditional logic: quick commerce (QC) and artificial intelligence (AI). "I don't think there is any rational thought to the valuation, even today, there are some of the deals that have happened very recently," he notes, suggesting that a "FOMO" (Fear Of Missing Out) dynamic persists in these areas.

RTP Global's investment strategy is horizontal, spanning consumer, fintech, SaaS, and EV. Amid multiple SaaS company executives’ statements about SaaS being dead in the AI era, Garg said that the space is as risky as quick commerce.

“The disruptive potential of generative AI, particularly from large players like OpenAI, which can swiftly capture use cases and pose a significant competitive threat to many SaaS startups,” he added.

While most mid-size VC funds have a dedicated India corpus, RTP makes India investments from the global fund. Garg sees this as an opportunity rather than a constraint.

“With roughly one-third of its investments in India, on par with its US and European allocations, RTP Global stands out. This integrated global structure offers flexibility, allowing us to invest more than the typical one-third in India if opportunities warrant,” he added.

Around 50 percent of the fund is for initial cheques, while the remaining is for startups that are growing and need more capital to scale. RTP invests somewhere between $1 million and $10 million in startups, taking up to a 30 percent stake in the companies.

The founder-first philosophy

At the heart of RTP Global's investment philosophy is the focus on the founder. "Founder is like the number one thing. A great founder will find his or her way out there, even if the market segment or Total Addressable Market (TAM) doesn't initially appear overtly promising," he emphasises.

He cited the example of FirstClub, a quick commerce platform founded by former Flipkart executive Ayyappan R, who, Garg said that proved his mettle in operations. Garg added that even those investors without deep domain expertise in a specific sector can still gauge the founder and build a view.

Garg comes with deep operational expertise, having worked with ecommerce firm Flipkart for over eight years. He has also worked with current Flipkart CEO Kalyan Krishnamurthy at the ecommerce firm as well as at Tiger Global, managing the investment firm’s portfolio briefly.

"The reason I moved to RTP was that they have a very strong belief that the VC partners need to have an operator mindset," Garg said, adding that the fund’s founder was also an operator, fostering a culture that values insights gained from hands-on business building.

Garg joined RTP three and a half years ago and has since built a 10-member team, which is a good mix of operators and VCs.

“Operators bring a grounded understanding of what can go wrong and the practicalities of scaling, focusing on milestones, while VCs contribute the dreamer mentality, identifying what can be big out there. This fusion allows RTP Global to appreciate operational complexities in certain businesses while also envisioning large-scale outcomes,” Garg said.