Spinoza said, ‘You must look at things in the aspect of eternity’ and Ben Graham made it a basic dictum for his tenet of value investing. And that, indeed, has made the difference in the way we have been selecting our investee companies – not ones that will blink fast and disappear, but ones that may survive the test of time.
What a year 2015-16 is turning out to be 3 years into its journey, YourNest began 2015 with 7 investments. In the course of first nine-months, there were external up-rounds and bridge funding in 5 and an equity swap in one.
There was more action in these 3 quarters with 5 new investments completed, and 3 more in the final stages of completion bringing the search for portfolio companies in the current fund to completion. And your fund now has presence in most ‘hot’ sectors – Consumer Internet, Online Market Place, Market Aggregation, B2B Marketplace, Software as a Service (SaaS), Platform as a Service (PaaS), Marketing-Tech, Heath-Tech and Analytics.
As the infant VC- space grows into a toddler, it is showing quick signs of maturing. To begin with, marquee VCs have raised large India focused rounds (USD 2.5 billion, at last count) for investing in the Indian growth story. This capital commitment promises that fund allocation for start-ups continues to be buoyant. There is, also, a clear change in approach from quick exits to nurturing businesses to their full potential. The Swedish investors AB Kinnevik recently stated ‘Many investors, not in a hurry to monetise’. There is also a visible shift from ‘scattering funds, to deeper commitments.
In another great sign for the industry, the government too has shown decisive, positive intent with its commitment for the sector, highlighted by a slew of initiatives. “Start-up India Stand-up India” is paving the way for ease of doing business, attracting domestic and foreign capital to the start-up ecosystem, incentivising entrepreneurship, and encouraging industry academia partnership. Further stimulus is expected as the government readies to act on an extensive report by the “Alternative Investment Policy Advisory Committee” headed by Shri N R Narayan Murthy.
The RBI too has stepped in to nourish the toddler industry, with Mr Raghuram Rajan making a commitment to ‘take steps to ease doing business and contribute to an ecosystem that is conducive for growth of startups. The RBI plans to help startups across sectors receive foreign venture capital investment and also enable transfer of shares from foreign venture capital investors (FVCIs) to other residents or non-residents.
YourNest has a young portfolio. The average investment holding period is only 15-months. Our focus is to nurture them speedily to their full potential, and we actively invite you to support these start-ups to leverage your areas of strength.
“And once you are awake, you shall remain awake eternally.” ? Friedrich Nietzsche
Sunil K. Goyal
January 31, 2016