Going sector agnostic to fund businesses

The startup ecosystem in India is growing by leaps and bounds, aided by the creation of a robust infrastructure and the emergence of venture capital funds willing to invest in multiple sectors, a top official of the Pune-based venture fund Windrose capital told DH.

“This has been a great year for the Indian startup ecosystem. We have seen at least one startup touch the unicorn mark every month this year. This is a great achievement. As an ecosystem, we rank third in the world. There is a lot of headroom to catch up with leaders in the space such as China and the United States, and I am sure there is a lot of potential in the Indian startups in this space,” says Rohit Goyal, Windrose Capital, Managing partner.

A month ago, the firm had announced that it plans to invest over Rs 200 crore in startups in India over the next two years. It also announced the initial closing of ‘The Next Billion Fund’, which will invest up to $30 million (approximately Rs 214 crore) in early-stage high growth startups across the country.

It has invested in a clutch of multiple startups in multiple sectors ranging from financial services, healthcare logistics, and data insights. Some of the other major investments by the firm include healthcare and logistics company Biddano and data services start-up Paper.VC.

Talking about their investments, Goyal says, “We basically look at startups that help in solving issues other companies face, those looking to solve issues in the financial inclusion space, aiding in fixing issues and creating better value chains. We are sector agnostic and look at the viability of the product/service than the sector it operates in.”

One of the firm’s major investments recently was the $6,00,000 investment in Noida-based financial products distributor Nivesh.com. The investment came from the Next Billion fund.

How do they do it?

Like most other VC funds, Windrose looks to pick up startups which have some sort of market presence and value. “We do not fund at the ideas stage, but do fund companies where we see good business models. These could be seed-funded or bootstrapped. We usually put in money along with other investors and not only offer them capital but other resources at our disposal that would help them scale. We mainly look after startups in the seed to Series A funding stage.”

The firm connects the companies they invest in with other partners, subject experts and so on. “We also look at reinvesting in some of these companies. If they emerge successful and are able to scale, it is also a successful investment for us.”

One of the biggest changes in the past few years has been the emergence of customer focussed business models. According to Goyal, the customer now has plenty of things to choose from and it is unique ideas that will eventually emerge on the top. “For instance, look at the fashion portal Nykaa that started out as a simple fashion store online and has managed to make a mark in such a short time frame. They are very close to achieving unicorn status at the moment. “

On the question if foreign VC firms invest differently as compared to their Indian peers, Goyal says, “ The Indian VC ecosystem is relatively new. It is slowly coming of age. I do not think there is a lot of difference in terms of investment choices. Moreover, most big boys in the investment game have Indian partners and teams based in India, who will be able to offer a local perspective to the companies on their investment choices.”