Venture capital: On the trail of buying power

There are four key areas we are active in — broadly they are consumer tech, consumer brands, fintech and fin-services, and SaaS [software as a service]. In addition, over the last six to 12 months, we have been spending a fair bit of time on emerging areas like climate tech and space tech. Gaming is breaking out in a major way. Some early signs of green shoots we’re starting to see in manufacturing. Even in these new areas, we’ve done a few deals; we are continuing to see a lot of activity. 

Fundamentally, we are a seed-stage investor. A bulk of our focus remains on partnering with the founders as the first institutional check. At the same time, we have larger pools of capital now; we are pretty flexible, so we can partner at later stages, at growth (stage) also. 

In terms of investments, we are a fairly selective fund; so while we look at every sector, we end up doing 12-15 deals every year. This is the pace we are comfortable with, when it comes to new deals. Last year, too, we did 12 new deals and nine follow-ons. This year we aim for the same pace. 

Consumer internet [companies that base their revenues on online transactions across categories] itself goes through cycles of belief and disbelief. As long-term investors, we’ve invested across cycles. At a macro level, some fundamental themes excite us. One, many more large marketplaces will be built in the Indian context, as there is rising affluence in the consumer class and the needs are more nuanced. We are also excited about consumer brands; we are seeing some of these brands starting to create large outcomes — the kind of outcomes big VC funds need. The third inflection point we’ve seen in the last one or two years is actually around the media and content platforms. 

PayTM is a publicly listed company and I won’t be able to comment on that. Generally, when we think about exits, we think of both IPOs [initial public offering] and M&As [mergers and acquisitions], depending on the journey of the company. Over the next three to five years, we think the market will be conducive to more and more IPOs and M&As. It was muted over the past year or so. Now we see a lot of optimism, activity coming up.