Some of India's top entrepreneurs and investors have come ‘together’ to start a new venture fund (pun intended). Freshworks’ Girish Mathrubootham, Eka Software’s Manav Garg and former Matrix Partners investor Shubham Gupta, have launched an $85 million fund- named Together- meant to back innovative software and product startups.
In a Twitter Spaces session with Moneycontrol’s Chandra R. Srikanth and M. Sriram, they spoke about their investing thesis, raising a fund during India’s biggest startup boom, splitting time between being entrepreneurs and investors and the opportunity in hand. Here are key takeaways-
Why Together Fund now? What are they addressing?
Girish Mathrubootham: We always wanted to accelerate the dream of India as a product nation. We realised that money is a commodity. What startups need is not money; they need operational help; they need the right mentoring, make adjustments in the early days to get to product-market fit, address large enough markets, expand the product vision, and hire the best teams to scale. Everything except money was missing in terms of early-stage advice. The name Together means we want to bring everybody in the ecosystem together.
Shubham Gupta: I always wanted to be a founder, and a stint I was trying to do for the last 10-11 years but I couldn't find a problem statement that I was passionate about. Working as an angel investor for the last 8 years taught me one thing that it is something I truly wanted to do. So in 2019 I moved back to India. Being a founder has been a true calling for me and when I got the chance to build this with two exceptional entrepreneurs who I truly respect, it was a no brainer for me. You can be a founder and also have a philosophy of helping founders in a very differentiated way. So the amalgamation of all these things got me together.
Existing VCs promise a lot of the same things. Why would startups pitch to you?
Girish Mathrubootham: What you are missing is how many startups are coming. We are going to see a ton more global B2B (Business-to-Business) startups coming from India. Many startups need access to capital. Often, we work with other VCs like Accel and Sequoia; sometimes we write the first cheque, sometimes they do. It is not like competition with other VCs. By the end of the day, if a founder gets funded, we are happy. Our goal is that founders must win.
Manav Garg: Looking at it from a founder's perspective, they have many questions from the start, how to get the funding agreements, should I move to the US or not, how do I get my first five customers; after the first five customers should I hire a sales manager? There is a new product-led growth wave going on, what is the best way to design a product for the user. These are some things where we are well equipped to help the founders. For a founder, they have the option of going to an operator-led fund to help him through the process.
What was fundraising during a boom market like? Was it easier than expected?
Shubham Gupta: The fundamental thought process for Together is long-term thinking. Be it our founders, the way we are interacting with founders; even in terms of LPs (Limited Partners) we went for long-term institutional capital. We are a Mauritius-based fund, most of our LPs are from US institutions. Obviously, it was not a cakewalk, we pitched our story. Girish, Manav and myself, we spoke to a lot of these LPs who believed in our story. They believed in our mission to really help India as a product nation. The market has also favoured us, this is a good market for fundraisers. We are fortunate that we raised the fund and are now investing.
What should one pitch to get funding? And how will you split your time?
Girish Mathrubootham: Vast majority of deals will be in B2B SaaS (Software-as-a-service) space. It's not just the two of us (Girish and Manav); the power of Together comes from the network of 150 founders who have skin in the game. They have pledged their time to help founders with contextual help. The opportunities will open for developer tools, consumer startups like ed-tech and fintech. We want to find the next set of global product champions from India. We are open to looking at any startups, but we are getting SaaS startups as of now.
As for time, you watch Sachin Tendulkar or MS Dhoni because they play cricket right, irrespective of how much money advertisements may bring them? Cricket is their identity. Similarly for me, being CEO of Freshworks is the main purpose of course.
The biggest challenge for Together
Girish Mathrubootham: Talent is going to be the biggest challenge for all of us, including startups. How do we get more ready-made talent from the industry? The opportunity is ample and is there, and we need smart founders who can crack it.
Manav Garg: I agree. Talent. To give you some data points, right now, if you look at the SaaS ecosystem, they employ about 40,000 people, and we expect it to go to half a million jobs by 2030. That's where we are going to see the challenge.Shubham Gupta: As a VC, the biggest challenge for me is to say no; so many great founders come to us, so telling no is a challenge for me. If we can help all founders without expectation, then we can become a great nation.