When Charles Dickens, wrote “It was the best of times, it was the worst of times…” he could well have been thinking of 2020. Except that he wrote these opening lines of his classic, A Tale of Two Cities, as far back as 1859. He also went on to write, in the same sentence, “…it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us…”
Today, as the world hesitantly – yet, hopefully – emerges from the COVID19-enforced lockdown, these words seem to be even more relevant; and I reflect on how dramatically life has changed while, at the same time, I look ahead with renewed optimism.
At YourNest, our ever-prudent approach has sometimes been questioned, but this is the year when our faith in our mission has been reinforced like never before. We were among the first – and few – VCs to spot the slowdown, and had cautioned all our founders to conserve cash and prepare for tough times. At the same time, we told ourselves that, instead of looking at a half-empty glass, we would see it as half-full and do everything within our prowess to protect your investments, nurture our portfolio companies and ride out the storm together.
I am delighted to share with you that we have succeeded on all three fronts.
To start with, we created history of sorts at the end of June, when we exited Uniphore with a 6.6x return and distributed a record 62% of the Fund I capital in a single stroke. At a more moderate level, we have also exited SmartQ in August, making 1.8x on the overall investment in a holding period of four years and distributed cash proceeds equivalent to 8%: cumulatively, a DPI of 71% of the corpus of Fund I.
Bold and timely decisions like these have helped us keep our commitments to you and have also played a critical role in keeping our portfolio startups on track. Our interactions with them have only increased and we have been intensely engaged with every one of our brave founders right through the pandemic. An exclusive webinar called ‘Friday with Faith’ was held between our founders and partners as early as March 27 to understand each company’s challenges, areas of help and growth opportunities. This was received extremely well and went a long way in ensuring that their mindset shifted from surviving to thriving.
In the true spirit of Challengineering (our vision which we had introduced in the previous quarter) our founders have emerged stronger. While, on one hand, they concentrated on managing their resources better, our inputs helped them re-energise their remote teams to think innovatively and boldly: new product launches, a sharper focus on customer opportunities, reinventing to remain relevant in the new normal, better cost management and creative sales and marketing strategies have all been deployed… you will read more about each of them further in this report.
Our team members – even as they worked from home – also focused on external opportunities: we conceptualised and launched a unique accelerated funding program called SOAR on May 1. In a 14-day period, we received 1,932 funding applications from DeepTech and SaaS startups across the country: a record number that took India’s VC industry by surprise and earned YourNest global acknowledgment for supporting the fledgling startup eco-system during the pandemic. The program was supported by several government and multinational partners and we are in advanced discussions with several shortlisted applicants.
In this report, you will find more details of SOAR and the never-say-die spirit of our Challengineer-founders. The fact that we have weathered this storm together, comes not from me alone but from the founders themselves with whom another webinar was held in mid-August where we took stock collectively and charted out the path ahead.
And this is why, to end on another quote, I believe that we will continue “to strive, to seek, to find and not to yield” (Ulysses by Alfred, Lord Tennyson, 1833).
Thank you, once again, for being with us.
Stay safe, always.
Sunil K. Goyal
Managing Director & Fund Manager
September 8, 2020