Several metrics showcasing the strength of the Indian tech startup ecosystem in NASSCOM’s latest report indicate that we are approaching escape velocity. India added eight new Unicorns in 2018, and now has the third largest number after USA (126) and China (77). More importantly, the time to attain billion-dollar valuation is now 5-7 years, second only to China (4-6 years).
2018 saw, for the first time, an India B2B SaaS company – Freshworks – joining the Unicorn club within eight years of being founded. Another surprise entry was Udaan, a B2B online marketplace, that achieved Unicorn status in just two years since inception. I am happy to report that we, too, have SaaS and B2B online marketplace startups in our portfolio. I must share that in December, the past President & CEO of Freshworks for North America – Dilawar Syed – held an interactive learning session with our entrepreneurs to share his experiences on building teams and culture for global expansion.
As we enter another year in our chapter, the values of prudence, patience and perseverance with which we built YourNest Venture Capital since 2012 have manifested themselves in both the funds: the YourNest Angel Fund – Scheme 1 and YourNest India VC Fund II. We remained true to our investment thesis, and invested further in DeepTech, enterprise-oriented B2B startups. 2019 does hold the promise of at least one portfolio company, reaching the INR 1,000 crore valuation mark.
However, nothing proves this more than the performance of YourNest Angel Fund whose Portfolio IRR is at 22.6% (since inception) with the NAV moving up from INR 16,389 as on December 2017 to INR 18,687 as on December 2018. With this fundamentally strong foundation, we are now focusing on exits from the first fund and are seeing strong valuations emerge in our portfolio companies.
For Fund II, the team at YourNest Venture Capital continues to balance the need for strong investor returns with careful investee selection. We reviewed 2,767 startups since January 2018 before shortlisting 320 of them and, eventually, investing in three: this method is very much in line with our belief that DeepTech and B2B startups require intensive analysis before we can commit your capital to them. We have offered two fresh termsheets for investment in Q4 FY19: an SD-WAN venture and a patent-led Computer Vision tech startup. The deal-pipeline continues to be compelling with extensive deliberations amongst our partners to pick potential winners. We are delighted to inform that, for the second fund, we are all set to cross the INR 300 crore fund corpus target: extending the fund-raising period till July 1st 2019 will allow us to invest in a larger number of promising startups and increase our shareholding in the most promising ones.
Within the YourNest team, this principle of ‘transferred trust‘ remains an abiding motto: your investment stays in safe hands as we identify winners and manage these funds even as we nurture bright, committed entrepreneurs to scale up and reach out to global markets wherever possible.
I am confident of sharing some path-breaking developments in the next quarter and, as always, look forward to your continued support.
Sunil K. Goyal
January 21, 2019