Indian founders with reasonable level of profitability right now should explore IPO: Peak XV’s Rajan Anandan

Rajan Anandan, MD, Peak XV

Indian startup founders with even a reasonable level of profitability should explore an IPO in the current market environment, Peak XV Partners Managing Director Rajan Anandan said on February 27.

This comes at a time when a slew of tech startups including Oyo, Digit Insurance, First Cry among others are set to get listed on the bourses this year.

“I am not even talking about Rs 1000 crores, even with just Rs 30-50 crores of profitability, I would strongly urge you to explore an IPO. Because the market right now is good for it...our view is that the Indian capital markets is going to be robust in the next 30-40 years,” Anandan said, answering a question on exits, at the India Digital Summit in Mumbai.  He was speaking to Shinjini Kumar, co-founder, SALT.

Anandan shared that nearly 40 percent of the Silicon Valley startups have Indian-origin founders. But many of the entrepreneurs are now starting up in India itself.

Bullish on AI

Earlier this month, Peak XV took over 60 founders to Silicon Valley in the US for an artificial intelligence (AI) tour in an attempt to take Indian startups global.  These included Peak XV's portfolio startups across AI, deep-tech, software-as-a-service (SaaS) and consumer domains.

When asked how the US startup ecosystem is different from India on their approach to AI, Anandan said that in the US today, venture capital is only focused on one bet which is AI. Whereas in India, though there’s a focus on AI, but it’s all about India and solving for grassroots level issues.

“What’s happening in India is we are seeing extraordinary innovations across all sectors and products. We are seeing a divergence of ecosystems,” he said.

Anandan shared that the US ecosystem is only focused on AI at the moment for use cases across building models, infrastructure, tooling, and applications. India is seeing more cohort-based AI innovation, he said.

“Over the next decade, we will see a significant divergence in these two ecosystems. As India develops, everything is getting built from scratch,” he said.

Peak XV currently has close to 30 AI startups in its portfolio.