For an entrepreneur and an investor, every decision for something is a decision against something else. Likewise, with life. We operate in a world of choices every day, every minute; and some of our decisions turn out to be right, while others appear to be questionable at that moment. Time passes and we look back only to realize that what seemed wrong, was not, because every experience teaches us something new.
I say this today, not nostalgically but confidently, as I sit and look out at the future we are creating collectively. At the same time, I am reflecting on the choices I made eight years ago in 2011: to exit an international role in South Asia’s largest telco, to enter the volatile world of venture capitalists, to create the only team of partners that includes a leadership coach, to seek founders whose ambitions went far beyond their tech-enabled ideas… these were all decisions that did not come easily.
But perhaps the one choice we made that seemed the most difficult was that of focusing on startups whose business would be built not on the more popular B2C sector, but on enterprise-led B2B domains in the DeepTech space. We made this choice early on because we saw the coming shift, not just in India but in global technology trends. B2C valuations had become inflated and startups required vast resources to attract consumers. B2B companies, on the other hand, were attractive and the opportunity to work alongside these founders and help them scale up for international markets turned out to be a rewarding challenge.
As I write this today, I can say with even more confidence that our investment thesis has turned out to be spot on:
- India is moving from a services economy to a product-nation.
- Along with an increasing focus on creating IPs, entrepreneurs are creating capital-efficient platforms
- In 2018, India saw eight tech unicorns being added: the highest ever
- From an analysis of India’s unicorns, a definitive trend is emerging: B2B startups are more capital efficient compared to B2C unicorns.
- 43% of tech startups in 2018 were in the B2B domain (40% in 2017).
- Compared to 2017, there has been a 50% increase in DeepTech startups.
As we continue to seek out promising startups, our positioning as a DeepTech B2B-oriented VC fund gets stronger: in the last 18 months, 65% of the interest received has been from B2B startups, of which 34% are creating DeepTech solutions.
I can also report with increased confidence now as the audited results clearly put us in the top quartile with some pathbreaking metrics:
- Of the 16 portfolio companies, 11 are active and have raised subsequent rounds.
- After our investment, these companies have raised 14x external funding.
- Net IRR stands at 21.46% and TVPI at 2.40x.
- With a strong exit imminent, the projected DVPI in Q3 FY20 should be 66%.
In conclusion, on behalf of the team here at YourNest and every one of our founders, thank you for your continued faith in our abilities, and for your patience, which will be rewarded soon.
Sunil K. Goyal
August 20, 2019