As the funding winter continues for over six months now, Managing Partner at India-based venture capital firm Omnivore, Mark Kahn believes that the early-stage deal activity is not much impacted.
While the valuations are not at 2021 high, they have dropped back to the 2018-2019 levels.
“I think seed stage valuations got a little out of control in 2020 and 2021, and they are now back to historic norms. Growth stages are compressed right now, but deals are still happening. 2023 will probably start brightening up in the second half of the year,” Kahn said.
Omnivore funds entrepreneurs building in the space of agriculture and food systems. Some of its portfolio companies include AgNext, Acquaconnect, and DeHaat, among others. Omnivore is currently investing out of its $97 million second fund and is in the process to close its $130 million third fund in a couple of months.
Hunger for climate and agritech
“We are seeing a major overlap between climate and agri-food today. I think the climate has captured the imagination of a generation of talent and a lot of people are building, what we would call agritech, and they might call it climate tech. We are also seeing more and more deeptech and life sciences companies,” Kahn added.
Further, he noted that he is meeting a lot of driven entrepreneurs, including some interesting ones that have come back to India from abroad. Kahn expects the number of such Indian Americans to grow even further after the recent tech layoffs and the impact of H-1B visa holders.
“I think the American dream for Indians is well and truly dead. Maybe people will go get their graduate degrees from the US and some work experience, but I don’t think it has the same allure as before. As opportunity in India increase, growth here is much higher than elsewhere in the world, and amenities get better, I think you will see more people come back home,” he added.