Presentation at the India Investment Opportunities Forum, London, July 09

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Early-Stage Investing in India
Shantanu Bhagwat
July ‘09
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Quick fact
• In 2008, India overtook Canada in terms
of amount invested in Venture Capital
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v ssocia s * Source: APARC Stanford Report, March 2009; Amount Invested from Dow Jones Venture Source
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Quick fact
• …although it still has a long way to go
50000
Amt Invested*
40000
30000
20000
10000
0
India China US
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v ssocia s * Source: APARC Stanford Report, March 2009; Amount Invested from Dow Jones Venture Source
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A Roller-coaster…
4Q ’08
• VC Investments in India grow by 90%
over the same period last year*
1Q ’09
• Meltdown toll: VC investments shrink
to $49 mn, down 58%*
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v ssocia s * Source: SiliconIndia and LiveMint
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…but macro-drivers still in place
A demographics-driven , consumer-led growth…
Overall Growth ~ 23%
1,268m
1,200
1,027m
Population (m)
800 811m Fast growing
consumer class
598m
Segment growth
36%
400
0
2001 2016
0 to 14 yrs 15 to 59 yrs 60 yrs & above
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…and a LOT of untapped growth
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v ssocia s * Source: Roopa Purushottamam, Future Capital Presentation, April 09
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Where are the “gems”?
• Services
• “A” teams with previous entrepreneurial
experience
• Sectors that are on a long-term growth
trajectory
• Education
• Healthcare (incl. diagnostics, medical records
etc)
• My favourite: cleantech
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Watch out for…
• Misunderstandings
• Pre-Money vs. Post-Money
• Verbal agreements
• Founding teams breaking apart
• A long-distance investment strategy
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India and China
• Similar
• Nascent VC ecosystem
• A large and skilled pool of engineers, scientists
• Rapidly growing domestic market
• Geographically concentrated activity
• …but also different
• In terms of market focus
• 87% domestic focus in case of China vs. 27% for India
• Sectors
• Internet, Software and Mobile Apps for China vs. Services and
Software for India
• Capital coming in (and amount invested)
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Indian start ups - The edge
• Strong outward (international)
orientation
• More hard-core technology plays
• Remarkable focus on managing costs
May well become formidable challengers to
start-ups in US and Europe
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Thank You
Questions? Comments?
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For more
• Visit my blog…
Global-Themes.com
• …and have a look at
UdbhavAssociates.com
The contents of this presentation and the opinions expressed therein (unless stated otherwise), are the intellectual property of Shantanu Bhagwat and should
not be used, quoted, transmitted or distributed in any form or manner, without the explicit and written consent of the author. © Shantanu Bhagwat, 2009
Email: info@udbhavassociates.com
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