Harish Bahl, Founder and CEO of Venture fund Smile Group, feels that the Indian market is ripe, ready and capable of building big global companies. Talking to BusinessLine about the current start-up ecosystem, Bahl said the overall market is maturing and becoming more active, with companies seeing exits and capital being returned to early investors. This reinforces the fact that India is a supple turf and a definite home to next generation entrepreneurs, who could produce big billion dollar companies. Excerpts:

How is Smile Group helping in developing the Indian start-up ecosystem? What have you done so far as a fund?

We are driven by our commitment to promote entrepreneurship within the digital industry.

Our approach has been threefold – building, investing (early stage investments), and partnering with international companies like AirBnb, WPP, Yahoo, to help them expand to emerging markets.

All three point to our single goal of evangelising the space in India and helping create opportunities to churn out successful digital entrepreneurs. Since inception, we have helped entrepreneurs build scalable companies from scratch, and expand operations.

How many start-ups have you invested in and what are your plans for this year?

Our commitment to encourage fresh talent with new-fangled ideas stands strong as we aim to nurture next-gen entrepreneurs.  Speaking specifically of early stage investments, we have made 7–8 investments in the last 12 months alone, and plan on closing 10-12 more in the next one year.

Which are the interesting segments that investors are betting on?

Our primary focus rests on creating successful digital entrepreneurs. That said, as a group, we are currently more focused on consumer and mobile-only businesses. We encourage ideas and solutions that create more employment.

TPG invested $100 million in Smile Group last year. How do you intend to use the amount?

The TPG partnership is not intended for investments in India – it is primarily focused on partnering with start-ups or firms in the US and helping them in internationalisation.

How much more capital are you looking to raise?

We are not raising any capital at the group level right now; however, we are in the process of raising more capital for our e-commerce companies.

How has the start-up ecosystem developed in India over the last three years?

In one word – considerably; the start-up ecosystem has matured significantly. The biggest testament is a strong layer of angels investors – a key ask for the growth of any start-up ecosystem. 

Today, we see greater acceptance for starts-ups from angel investors – this could well be attributed to the standardisation of processes on how the contracts are being structured.

Additionally, a quick scan of the market will underline a positive shift in the overall sentiment, indicating India’s readiness to create bigger companies.

What are the key factors aiding the growth of start-ups?

India is a hotbed for start-ups. There has been a wave of start-ups across verticals since early millennium days.

What started off with travel went on to matrimony, spread cover across financial services, e-commerce, mobile economy, on-demand services followed by new media, clearly highlighting opportunities the Indian market offers.

Apart from this, factors like the burgeoning economy and rising consumer purchasing power have offered strong hooks for entrepreneurs.

 That said, consumers’ appetite to experiment, coupled with their enterprising disposition, has also paved way for innovative start-ups. 

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