Sanjay Swamy, Managing Partner at Prime Venture Partners, an early-stage investment firm, spoke to BusinessLine on the year gone by and the outlook for the e-commerce industry in 2018.

What were the major inflection points in the e-commerce industry in 2017?

It has been a pivotal year for e-commerce. Apart from the financing rounds of biggies such as Flipkart, BigBasket, etc, the more interesting story is of the infrastructure that will power e-commerce which got a big boost, To use an analogy from driving, we will look back at 2017 as the year when we went from third to second gear to get the power to accelerate again into third, fourth and fifth gears.

Three key elements have laid the foundation for the future — dramatic adoption of mobile internet, mass adoption of digital payments and faster access to credit.

How do you rate investor sentiment this year and what does it look like for 2018?

Investor sentiment is high — we are seeing the advent of several overseas players and an appetite for later-stage rounds. This bodes well for early-stage investors who now have the confidence that companies which go through early pains and establish a product-market fit and unit economics, will not be left at the altar.

However, investors will remain conservative about building businesses right. Good companies will not die of starvation, and we have all learnt the hard way that some might die of indigestion.

What are the next big opportunities that investors will tap in 2018?

Vertical e-commerce and B2B e-commerce will be two big areas that investors will find exciting. Investors are eagerly looking to fund solutions for the first-time internet/smartphone user in India, in security solutions firms and companies that have unique distribution hacks, as e-commerce products will be undifferentiated, but distribution can be a differentiator.

What is your outlook for the industry?

I expect entrepreneurs to jump in and address several unsolved problems in India. Several ‘newnicorns’ will be born in the next 12-24 months, many of which will be formed by (future) alumni of first-generation e-commerce companies such as Flipkart, Snapdeal and ShopClues.

Aadhaar, IndiaStack and Digital India are the envy of the world. India is blazing a new trail —the model in India will be very different from the rest of the world. Whether you are a big company or a start-up, those who build solutions for India’s unique conditions, platforms, demographics and interests will win big.

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