Peak XV’s Shailendra Singh stresses on free cash flow, building right culture at founders retreat

Shailendra Singh addressed portfolio founders for the first time after Sequoia split.

Nearly 250 founders backed by Peak XV partners (previously Sequoia) have congregated at the verdant and luxurious Prestige Golfshire resort and spa in the outskirts of Bengaluru this weekend.

This is the first such meet-up after its split from the storied Silicon Valley firm and comes amid a challenging operating environment for startups.

Founders who were part of the gathering said Peak XV Partners’ Managing Director Shailendra Singh struck an optimistic tone in his welcome note, expressing bullishness about India’s potential over the next few decades. He also emphasised the need for companies to generate free cash flow and building the “right culture” with the “right teams.”

In a 40-minute welcome note, Singh asked founders to have clarity on product propositions and how they should have a multi-decade mindset, build defensible moats, and should prioritise solving problems over money.

He also said that founders should have a “relentless focus on economic engine and cash flows while having a deep understanding of capital allocation," according to people who attended his talk.

Peak XV did not respond to queries sent by Moneycontrol.

Singh’s comments on free cash flow come at a time when Indian start-ups are grappling with a funding winter after the euphoria of 2021, with investments dropping by more than two-thirds. Startups, over the past 12 months, have thus focused on cutting cash burn and paring losses. In fact, over the past three months, many startups including Swiggy and Meesho among others have officially announced either profitability at a company level or at least for their core businesses.

The meet-up is one of the largest gatherings of founders organised by a VC firm in India, with over 250 founders in attendance. Founders of some of Peak XV’s top firms including CRED, Groww, Moglix, Clevertap, Pine Labs, Jupiter, Freshworks, Unacademy and Razorpay, among others are present at the meet-up. It will be a two-day event, with a special 'Foodtball Fireside' chat with Indian Football legend Sunil Chhetri on August 19.

Singh further said Peak XV learnt a lot from Sequoia but now wants to chart its own path and become a global venture firm. Peak XV also plans to open an office in the US to help Saas firms operating in the region. Singh said that Peak XV is close to hiring its first executive in the US.

Singh, in his address, further emphasised the need for founders to build the “right culture” as well as having “the right focus, the right team and the right system,” founders who attended the presentation said.

Singh was also optimistic about the India opportunity and how Peak XV is bullish on the country as it “grows from a 3 trillion to a 50 trillion economy in the next 30-50 years.” He said India presents an opportunity to build a “generational company that can last at least 50 years.” He however cautioned that only 1 percent of companies can do that consistently. He said that Peak XV has signed more than 10 term sheets since the split, has exited three firms, and hired 9 new people.

The Founder Retreat organised by Peak XV comes at a time when some of the VC’s biggest portfolio companies including India’s most-valued startup Byju’s, have come under fire for corporate governance lapses.

Peak XV, with over $9 billion in assets under management (AUM), is one of India’s most active early-stage venture capital firms. The VC has more than 250 companies in its portfolio, including close to 40 unicorns.