The rise of a large number of startup founders and angel investors ploughing in money into the startup ecosystem and the rise of impact based startups are some of the encouraging trends in the startup space in India this year, a top official of Village Capital, a VC fund told DH.
Deepak Menon, Chief Program Officer, EMEAA at Village Capital, a US-based VC fund, is looking at startups to build scalable solutions that help people and small businesses become financially healthier and stable. The venture capital firm has partnered with PayPal and MetLife to provide mentorship to a clutch of Indian entrepreneurs.
On the cohort in India, Deepak explains, “Village Capital selects entrepreneurs that go into accelerator programmes with the help of its partners and local advisory boards. In India, the advisory board includes representatives from Grameen Capital, ICICI Bank, Bill & Melinda Gates Foundation and Yunus Social Business, among others.”
In this programme, Village Capital is looking at startups that are past the idea stage, and are in the post-revenue stage. They look for startups that bring to the table solutions in financial services, agriculture, education areas and can be scaled internationally. The firm aids them in meeting investors and lets entrepreneurs in the cohorts decide among themselves who should receive funding.
The cohort comprises 12 early-stage ventures that focus on financial health, nine being from India, two from Sri Lanka and one from Bangladesh.
The Indian startup scene
According to Deepak, the Indian startup ecosystem remains robust and is seeing a shift towards impact-based startups in multiple areas. “There are many accelerators, a lot of money remains in the system and the startup ecosystem has not seen any impact of the slowdown at the moment.”
The rise of angel investors within the country and successful startup founders ploughing in money into the ecosystem will aid in the growth of the ecosystem more. “These successful entrepreneurs will be able to offer insights and resources beyond financial aid,” he states.
A major focus area for Village Capital is the fin-tech space in India, that is growing by leaps and bounds. “The fin-tech revolution in India has made things easier for individual customers. In the coming years, it will be interesting to see the manner in which this space opens up for small and medium-sized businesses.”
Deepak states that a period of consolidation may be ahead for both investors and startups alike.” There will also be a period where investors will wait and watch to see which of these startups and models are actually able to scale and look at factors that offer differentiators.
On the question, if Indian venture capital funds invest differently from the big boys in the business such as Naspers and Softbank, he says, “Not really. However, for India based VCs, it will be easier to understand the problems a startup is making an attempt to solve. For instance, a solution to get better potable water, or find a way to get patients to the hospital quickly to the hospital during a medical emergency is bound to strike a chord with local investors, since they also come face to face with the same issues.”