Sanjeev Bikhchandani who founded online classifieds firm Info Edge in 1995 invested $1 million in restaurant discovery and food ordering platform Zomato in 2010 and today Info Edge has over 25% stake in the company.
Sanjeev Bikhchandani who founded online classifieds firm Info Edge in 1995 is prominently known as one of the first few people to have experimented with the internet platform in India.
He survived the infamous 1999-2000 dot-com bust and today InfoEdge is a conglomerate with multiple businesses in the area of real estate, matrimony and job hunt such as 99acres, Jeevansathi, Naukri, among others.
He is also a well-known investor and was among the first few to spot an opportunity in the food-tech sector. He invested $1 million in restaurant discovery and food ordering platform Zomato in 2010 and today Info Edge has over 25 percent stake in the company.
In an interaction with Moneycontrol, Bikhchandani talks about how the startup ecosystem has evolved in the last 30 years and the way to succeed in this space.Edited transcripts:
Q. You started your company almost three decades ago. How has the landscape changed in these many years?
A: I think the situation has evolved. The first big thing is that entrepreneurship as a career has become mainstream. If you go to an IIT or an IIM and ask how many of them want to become an entrepreneur may be 25-30 percent of the hands will go up. 30 years ago when I was in B-school that was not the case. Just 5 percent of the hands would go up. Second is, it has got societal acceptance. The third is, that even the ecosystem has evolved. You now have support and angel networks. All of these were not there then or were very scarce. Even the technology has evolved.Q. What are the key drivers for the current ecosystem?
A: The fundamental business principles have not changed. You need to have a focus on the customers. Solve an unsolved problem. Try and be capital efficient. Try and do more with less. Get to revenue faster than later. Hire good people. Be good to people and share the wealth.Q. 2018 saw a lot of upheaval in the startups' space. There were unceremonious exits of founders from their startups. There also were some big-ticket M&As. What sort of impact will these have in the way the sector has perceived things so far?
A: It is a competitive marketplace. There is enough capital going in enough companies. So companies are trying to succeed. The truth is entrepreneurship is Darwinian. Some will succeed, many will fail. That is the nature of the beast. Consolidation and takeovers are also part of the game. People exits can happen and they do happen and you got to live with it.
Q. American companies have entered India in a big way. The $16 billion acquisition of Flipkart by Walmart was a much-celebrated deal. However, many domestic companies are crying foul and demanding preferential treatment from the government. What do you have to say to that?A: If the government has taken principal decisions that we are largely an open economy and it is hard to move away from the decision then you will have to accept the fact that there will be foreign competition and there will be overseas companies coming in. Having said that, it is up to Indian entrepreneurs to innovate. What should not happen is a couple of things. There should be a level playing field. Rules should be the same for everybody. Second is there should not be any predatory pricing.
Q. Could you elaborate on that?A: Level playing field will ensure that the rules are the same for everybody. You cannot have differential taxes for companies filing out of Ireland versus a company in India. Predatory pricing means you don't what people selling below variable cost just to drive away the competition.
Q. What suggestions do you have for the upcoming startup policy?A: We should look at Section 56 (2) in the Income Tax Act. It says that when a startup in India raises money and in an event that the income tax officer believes that this is too high a valuation he could charge tax. That should be looked at.