VC Talk with Anupam Rastogi, Principal, Nokia Growth Partners. Published in SiliconIndia 6.8.2014

Areas of Focus & Emerging Technologies to Bet On

There is immense ongoing innovation surrounding the mobility space. NGP has always focused on mobility and within that space, we have outlined five key investment areas that we have focused on for a decade and built up strong thematic expertise in. In each of our areas, we see long term fundamental shifts and disruption which creates good investment opportunities. Those areas include:

• Local Commerce driven by deeper digital intermediation of offline consumption, SMBs coming online and the rise of the sharing economy. Investment examples include India’s Quikr and Ganji, Quikr’s equivalent in China.
• Connected Enterprise driven by the ongoing shift of enterprise software from premise-based monolithic systems to the “mobile+cloud” paradigm. Investments include NetMagic and Kaltura among others.
• Applied Analytics & Data driven by a number of disruptive shifts in advertising towards technology-driven programmatic buying using AI and algorithms as well as a need for larger data management capacities and analytics driven businesses. Here great examples of companies we have invested in are Rocket Fuel, PubMatic and Vizury.
• Mobile consumer-facing platforms are rapidly raising consumption of content and services over smartphones, tablets and other platforms. Here, we have investments in UCweb, Babbel and MAG interactive just to name a few.
• Connected Car driven by the use of connectivity to the cloud to deliver better safety, entertainment, navigation and utility services to the automobile. We have a number of companies in the portfolio specializing on sensors and location technologies.

We also focus on growth stage investments, meaning that we invest at a later stage in companies who already have a shipping product and a few million in revenues. Our approach is global with offices in India, China, Europe and U.S.

The envelope of innovation is expanding swiftly beyond mobility, towards a more comprehensively connected world – with significant activity in areas such as wearables, connected car, smart homes and Internet of Things. Nokia recently announced its vision and new focus around this “Programmable World”. NGP has a keen focus on this space and is looking to back strong entrepreneurial teams with solid execution skills and differentiated technology in these areas.

Indian Venture Capital Ecosystem is Nascent Yet

Each venture market has a combination of common universal fundamentals and specific local practices and flavors. The Indian venture capital and entrepreneurial ecosystem is relatively young, but shaping up nicely. The ecosystem now already has many companies of a caliber which is comparable to the best globally.

Teams in India tend to be earlier in their careers, but are often very high on energy and optimism. There are very few serial entrepreneurs around, simply because the ecosystem has not existed for very long. Companies often have to build basic infrastructure and systems along with their core product, and deal with significantly more baseline friction in getting businesses off the ground. Enablers such as digital payment mechanisms and reliable logistics, which are taken for granted by global companies, often need to be created from scratch or worked around. Hence, execution capabilities, resilience and resourcefulness become paramount.

The Indian market offers significant first order opportunity for value creation, as many segments are growing rapidly with increase in overall consumption or shift from offline to online. However, for companies selling to the Indian market, monetization is often tougher, acquiring customers tends to be expensive, collecting receivables is hard and scale could be elusive. So, entrepreneurs need to be very thoughtful, frugal and ingenious in order to create a viable business. The good news is that once you get the business off the ground, the aforementioned challenges create a large natural barrier for competitors and make your business more valuable.

The pace of value creation in the Indian startup ecosystem is rising rapidly, digital platforms (Internet, mobile, social) are reaching scale, and we are starting to see many successful cross-border companies. With this, many of the differences and challenges are beginning to diminish.

My Piece of Advice to Entrepreneurs

Great companies begin by solving a real customer pain point in a large market and becoming the best solution for that over time. Once past the hurdles of getting to a product-market fit and getting the basic business model right, keen use of analytics and metrics to drive growth and leveraging best practices from other companies, industries, and geographies can provide the edge in a competitive business environment. This is where the right board, investors and mentors who have a view into a broader set of companies and geographies can be instrumental.

The tech startup ecosystem in India is at a very exciting juncture. With mass adoption of digital platforms, rising propensity to consume online, and increasing proof points around cross-border product companies, it is a wonderful time to be an entrepreneur in India.

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