Gaurav Dahake

Here's one more theme that has played out over the past decade in India SaaS: SaaS companies that sell into India/Asia (non-China/Japan). There's been a reasonably large set of investors in India who have been default no in this category, based on perception of limited TAM and GTM challenges. However, there is reason to be optimistic for this theme (we are!). A reasonable set of companies in the ecosystem have scaled, such as MoEngage, Darwinbox, Capillary Technologies, Yellow.ai, Unicommerce , Gupshup, CRMNEXT, LeadSquared. Companies like Salesforce, SAP etc have reached multi-hundred million ARR in India. As a result, the potential scale from sales in India has grown from the $15-20mm that people used to talk about 5 years back to perhaps $50mm in India, overall $100mm-150mm in Asia. I think we'll see more companies continue to get funded here as IT demand in India/SEA deepens and local requirements (mobile, India Stack, regulations, languages) get addressed. Founders and investors will need to tune into this being a solid path to go but will take longer to get to impact than US/EU-focused companies. Some characteristics we see at India/SEA-facing software companies: * Many start out in SMB but then find scale & success selling into enterprises. India market has a ton of SMBs (10mm+), a relatively light mid-market and a significant set of large enterprises. * Products tend to have feature sprawl and design-deficit but this can be fixed. * Some large sectors that are pulling at enterprise level e.g. BFSI, multi-sector conglomerates. Early traction from digital native companies (but naturally capped market). * Natural to go to SEA & Gulf countries. Product could remain fairly similar but sales & marketing motion can be quite different. To get really large, feels like will have to end up going to US/EU markets eventually. * ~10 years to $100mm ARR, with market leadership in Asia * Gross margins start out perhaps 10-15 points lower than corresponding companies in the US/EU but trend up over time. * Most India-facing SaaS companies are starting as India Pvt. Ltd. today, compared to 5 years ago (versus US C-corp), with a view to going public in India at $50-100mm revenue level.

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Thanks Bismah and Inc42 Media for the insightful coverage and deep dive into the vital role of operator VCs! Bismah's thoughtful analysis underscores the growing need for operator VCs in today's startup landscape. As an operator VC , I've witnessed firsthand how founders increasingly value more than just capital. They seek partners who bring operational expertise, strategic guidance, and an extensive network to the table. These elements are crucial for driving sustainable growth and navigating the complexities of scaling a business. At GrowthCap Ventures , we understand the unique challenges faced by early-stage startups, which is why we prioritize offering not just funding, but also hands-on support and access to our extensive network. Together, we're empowering founders to realize their vision and build transformative businesses. #OperatorVC #StartupEcosystem #Gratitude

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I completely agree with Sabeer Bhatia about the PE Mindset of VCs in India. I think as Founders we should focus on convincing the customers. If your product is great and you need funds to scale, you will find many lenders. https://lnkd.in/dDw-a9_i

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"We bought a 13-acre piece of land in a village called Sikra in Kutch which is enough for us to reach a revenue of 500 crores." 🔥 Ep#08 of The India Opportunity Podcast with Aditya Aagare from Thermoflyde is out now! 🔥 Watch here: https://lnkd.in/g6JjrGq6 We talk about: > The market opportunity in the refractory space - north of $30 Billion USD globally > How Thermoflyde is aggressively growing its market share by taking on RHI Magnestia (a $3 Billion revenue-generating, publicly listed business) and has grown 100% year-on-year in terms of REVENUE > How starting up in college taught Aditya lessons about entrepreneurship the hard way > Focusing on customer service as a competitive advantage > Building an IPO-able, cash-flow-positive business > 500 Crores revenue in sight with current capacity and potential to grow much bigger > Aditya's goal of positively impacting 1000+ lives > How traditional manufacturing businesses can be multi-baggers over decades in the public markets > How kindness from angels helped them survive in the first 2 years Great episode for founders looking to build IPO-able businesses, with key insights into how to prepare your business at the earliest stages if IPO is an outcome you're working towards. Thermoflyde Industries Private Limited is destined to be a big success story emerging in the traditional manufacturing space and we're early backers via Swadharma Source Ventures - SSV. Thrilled to share Aditya's story with the world. #india #manufacturing #makeinindia #rhimagnestia #refractory #steelplants #ipo

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To be honest, most VCs in India have not found product market fit (PMF) yet. I believe, you have hit PMF as a VC when you have – 1. Top 1% founders are coming to pitch to you, 2. The founder is willing to take your money at a lower price than the market might give him/her. 3. You have built capabilities to pick the founder and market you want to invest in and the confidence to pass on deals that don’t align with your vision. Best example of this is YC , ~4.5% of the startups that have gone through Y Combinator since 2010 have become billion-dollar companies.  Founders don’t just take their money—they choose YC’s standard terms even after raising at a higher price from other VCs. That’s true PMF for a VC. #VC #PMF #funding

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Online shopping of jewelry is growing at a CAGR of 28% & offers $77B market opportunity. Enter Eternz Fashion Private Limited - A one stop shop for all your jewelry needs, TDV Partners latest investment and portfolio company. It is an Omnichannel curated marketplace for Jewelry focusing on millennials & GenZs with focus on personalization & customization from a variety of brands from not just India but globally. Jewelry market’s online shopping penetration globally is around 8% with developed markets like US having 12% contribution to the total sales. India hardly has 2% online penetration currently. The no. of jewelry brands out there is increasing by leaps and bounds. You might have seen a bunch of jewelry startups in the season 3 of Shark Tank India already. With this trend increasing further, the need of a platform, one stop shop kinds for all the jewelry needs is evident and Eternz Fashion Private Limited is the answer to that. Excited to back Arthi Ramalingam in building Eternz along side Kae Capital, IIMA Ventures, Gemba Capital & Venture Labs #Eternz #jewelry #marketplaces #portfolio #investment https://lnkd.in/g-ggyiFS

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Indian venture market has exploded. Someone reported that there are 800+ funds/networks/syndicates/ accelerators active in Indian venture market now. Not sure, if that number is correct but if you are an early stage tech founder on your fundraise journey, chances are, you would meet hundreds of people. While majority of the fund houses are doing incredible work and shaping the ecosystem. There are certain kinds of investors you need to identify & avoid to save time and stay focused: Sharing from my personal experience, top 5 such cohorts to avoid and the takeaways for the founders: 1. Data collectors: At early stage, you don't have historical data to present. Your projections are just that, Projections. I wasted one whole week discussing with a prospective angel investor on why the CLTV to CAC ratio is x, and not y. Takeaway: Discuss high level strategic numbers only without going into the details. None of the projections would be accurate anyway when rubber hits the road. 2. Document collectors: Met few folks, who would watch from the fences and ask for n number of documents, data rooms, statements without sharing the purpose of the ask or even revealing their investment intent. Takeaway: It is supposed to be a bi-directional conversation. Say 'no' often, till the time, an official relationship is established. 3. Valuer (! investor): At early stage, valuation is a function of multiple parameters, the opportunity itself, the team, or anything else except steady cash flows, because you don't have much. I wasted another week with a prospective investor trying to justify valuation, had to shut down that conversation, after both of us started quoting Aswath Damodaran and his valuation principles. Takeaway: Too much content on the internet for both parties anyway. Shouldn't be a bone of contention at early stages. 4. Facilitators posing as investors: Met numerous people, who would go to any lengths to pose themselves as serious investors, even buying paid media articles. Only to reveal at the last: The success fee. Takeaway: Avoid facilitators until Series A 5. Brokers posing as market makers: People posing as market makers sharing tons of gyaan on LinkedIn but are actually deal brokers looking to make quick %. Personal experience: Two rounds of conversation happened and then out of blue, they added a third party in the mail trail, someone who facilitates mergers & acquisitions. There wasn't even a single instance in the past conversations where we indicated any such intent. Takeaway: Avoid name & shame in public but at least share within founder communities. #venture #fundraise #startups #investing

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Story of apna :Job Platform. There is financial engineering, bad idea and senseless funding. What's the worse? After knocking on Hundreds of Investors doors I have realised that our VC ecosystem is dangerous to the Indian Start up bubble. Imagine how the conversation of Apna founder must have gone. Apna: I have this crazy idea. Apna toh life ban Jaayega. VC: Hmm. Tell me. Apna: I want to build LI for blue collar jobs. VC: Okay. But that's not what I wanted to know. What's your background? Studied from where? Where did you work? Apna: I worked at Apple & Intel, completed MBA from Stanford, previously founded Cruxbot (acquired by Kno Inc, Intel) and Incone Technologies (hydropower automation co). VC: That's marvelous. What's market size? Apna: LI has abt 500 million, now considering a world with population of 6 billion 4 billion + are working. So at the very least 2 billion. VC: Oh that sounds nice. Even if you make 1 dollar on every person, you will end up with 2 billion. I like how green you are 💚 Apna: Does that mean you will invest? VC: Ofcourse. It helps that I know your friend who worked with you. Apna: Let the Games begin Then comes financial engineering. I wont accuse Apna because as long as law allows it, they are free to show their finances in whatever way they want. If Investors didn't know this, I would be surprised. When these "Blue chip" founders (Great college, great companies) as one investor told me fails, people dismiss it as these guys start with ideas which are based on solid ground research & Initial feedback. That's how investing is & thus the tradition of loss making yet highly valued companies persist. On the flip side, Imagine how Apna could have worked. * Create a network of all small retail local HR placement agencies. There are multiple of those across India. City by city onboard these guys on your platform and provide tools to upskill this force. * Online you will start marketing like apna has marketed so far and could have got another set of people ready. * Next, you go to corporates and tell them we will upgrade local candidates. You build a virtuous cycle as well as on ground presence. And the best part is doing all this wouldn't need 900 crores but just 90 crores. HR agencies want to make money, Corporates want easy access to resources, candidates want job and Apna wants reach. But Alas; Nirmit Parikh, founder and CEO of Apna, the blue-collared jobs platform India's youngest billion-dollar startup amid Covid-19. A elite heavy, elite favoring VC ecosystem that operates like a Frat Club will ultimately take it's toll on the health of Indian Startup Ecosystem with mediocrity emboldened and talent ignored. Investors do not care, founders can't do much & markets continuing to celebrate money no matter how many fall by the wayside. #investors #indianfoundertales

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My Take on Gokul Rajaram’s Software IPOs in India👇 India has seen several B2B SaaS IPOs in the last few years. When Rategain IPOed on Indian public markets, their revenue was $40M with $4M in operating profits and $1M in profits after tax. Today 2 years after the IPO Rategain is a $100M revenue with $20M in operating profits and $15M in profits after tax. When Rategain IPOed its market cap was $500M. Today they are valued at $1B in Indian public markets. As I always say, if you do $50M of revenue as a B2B SaaS company based out of India, Indian public markets will make you a Unicorn. You do not need private investors to make you a Unicorn. And public market Unicorns are real as they are vetted by millions of retail investors as well as institutions like HDFC and Kotak. I see Rategain being a $1B revenue company in the next 10 years, valued at $10B in Indian public markets. India will now see more such success stories which are built from India for the globe. India’s QIB (Qualified Institutional Buyers) and retail investors are hungry to buy B2B SaaS companies, built in India for the globe. This is the first wave where we are seeing B2B technology companies being built out of India and listed on Indian exchanges. The US has been seeing it for the last 40 years, and it accelerated with the listing of Salesforce. The next 25 years will be the Amrit Kaal in India, where we will see 100,000 new individuals working across 1000s of such companies create Rs 100 crores ($12M) of wealth individually.

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Quick commerce in India is the biggest consumption story in the world right now. Billions of 💰 are being invested by US and other VCs to change the way how millions of Indians shop 🇮🇳 . It is SUPER INTERESTING to see how this market is evolving literally under our eyes daily. The Morning Context has an excellent piece on it today. It got me thinking of 5 things. But first, the article makes the point that QC works in India because of high population densities, an unorganised and inefficient legacy supply chain and low rider cost 🏍 to average order value. Their article is posted in the comments section. Here's what came to my mind: 1. Viruses can permanently change consumer behaviour: Would the acceleration in QC adoption have happened if rapid digitisation hadn't been driven by the pandemic. High population densities, legacy supply chains and cheap labour existed pre-covid as well. 2. Did your family astrologer predict the QC future we are building: Predicting the future is always hard. More square footage was being built for malls under the hypothesis that India will transition from unorganised retail to a formal retail format. While for some formats this will continue, think white goods, for soft categories it looks like brick and mortar might be the most expensive and risky way to start. Wonder if in a country so into astrology any astrologers predicted the rise of QC because.... 3. Consultants and analysts were clueless: Entrepreneurs build the future, and consultants at best are slow followers. Go back and look at their reports from 10 years ago, no one was talking about the rise of QC. Everyone was on and on about how underpenetrated organised retail is and writing bullish stories on listed brick and mortar retail companies. 4. Will the marriage of fast fashion and quick commerce be all song and dance: What's in store here? Shorter supply chains like Shein, cheaper products like Primark, and quicker inventory turns via QC or risk of higher returns and inventory bloat. Time will tell. 5. FMCG companies should hire tutors to study disruption theory, but not from Byju's: Many of the MNC's don't have a playbook they can get from their global parent companies - QC is a uniquely Indian phenomenon. If their Indian listed businesses trade at 50-70x PE multiples, their future is pricing in so much growth and stability. "All of the future is in the price" as one of India's leading equity investors responded to my chat message. What will crack first, FMCG multiples or QC momentum? Last week I wrote about Zomato and Zepto, two leading QC companies in India and their world class execution even if they copied this model from abroad. The link to that post is also in the comments.

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Who would invest in founders who have wasted $50M? Koo, an Indian microblogging platform, recently shut shop after raising $50M in capital. Everyone has their views on why Koo failed. IMO, the biggest reason behind its failure was a lack of PMF (Product Market Fit). Koo spent much money on marketing and didn’t build a product people wanted. It kept harping on nationalism, a Twitter for Indians, made in #India. This approach failed. However, this doesn’t mean Koo’s founders aren’t smart or intelligent. I wrote in an earlier post that we shouldn’t be surprised if Koo’s founders raise fresh capital for a new startup. To many of us, this might seem grossly unfair. Millions of smart, hardworking founders are struggling to raise capital while investors are backing failed founders who have wasted millions of dollars. How is that fair? It confirms the widely held belief that the #venturecapital industry is broken and corrupt where a few people with the right connections get all the capital while others don’t see a dime. It shows that the VC industry is a closed group, a cabal where who you know matters more than anything. While these are just complaints, most people who criticise VCs don’t understand how startup investing works. VCs welcome failures. They embrace them because they know failures are inevitable. When VCs invest in 20 #startups, they know 15 will fail. The goal is to invest in startups that can give them a 100x return. Failures are part of the game. They are unavoidable. The aim is to back founders who can build such 100x return companies. Hence, failures are not looked down upon in the VC industry. It’s similar to the American culture where society appreciates the people who take risks, and it easily accepts personal bankruptcies that result from this risk-taking approach. There’s no taboo in failing in the USA and the VC industry. I’m sure Koo’s founders have learnt from their mistakes. It’s an expensive mistake and not everyone is so lucky to have this luxury to spend $50M on their education. ;) However, most VCs will back Koo’s #founders because these founders know how to raise capital and they know how to not build and scale tech companies. Their past failures have improved their chances of future success. In the VC industry, Failure is Good.

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🎉 Excited to share as an indirect investor that DevRev, backed by Khosla Ventures, has officially become a unicorn. Dheeraj Pandey, CEO at DevRev, puts it perfectly: "At the end of the day, every developer is either building something new or fixing something related to the product. But inefficient systems and processes keep developers further from their consumers. We believe there's a better way to build, operate, support, and grow your business through code. That's why we've embarked on a journey to create the Developer Customer Relationship Manager (DevCRM) that we hope will help makers build the most customer-centric companies on earth." Here are some key points about DevRev: - Co-founded by Dheeraj Pandey (co-founder of Nutanix) and Manoj Agarwal (former SVP of Engineering at Nutanix). - Offers three modern CRM apps tailored for support, product, and growth teams. - Already making waves in Southeast Asia. If you're in the region and have questions, reach out to Jeffin Mathew. 💡 Fun fact: Nutanix was also backed by Khosla Ventures. Congratulations to the entire DevRev team on reaching this incredible milestone in under 4 years! I'm thrilled to be part of the journey as a Limited Partner in 2 | Twelve one of their seed investors.

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I built a 4 step framework to understand the VC business. Access → Picking → Entry → Exit. It works for all types of VC’s irrespective of their size, industry focus & geography. Let us dig deep. 1. Access – Is the next Sachin Bansal coming to pitch to you? If not, it is NOT worth being in this business. Unlike the stock market, where anyone can open an account and start buying, in venture capital, you risk falling into the trap of adverse selection. This can significantly impact your IRR. To avoid this, it is essential to make sure the top 1% founders are pitching to you and you are seeing 80% of the deals in the market. 2. Picking – You receive 400 applications every month. Congratulations Most VC’s proudly flaunt this in their pitch decks – but are you actually seeing all 400 or just the ones referred to you. What if the next Sachin Bansal filled your application form but you never saw it? So seeing everything is a must but it is only the first step. The real challenge lies in picking the right market and founders that align with your investment thesis. 3. Entry – You Choose the Asset, But the Asset Also Chooses You. You might excel at sourcing the best opportunities and making the right picks, but if the founder doesn’t choose to take your money, all that effort is in vain. Without a strong brand, even if you nail steps 1 and 2, you’re still at risk of missing out on the top deals, which can ultimately lower your IRR. 4. Exit – The Final and Most Crucial Step After making 20, 30, or even 50 bets, the ultimate question is: What’s the exit math to ensure a strong return for your investors? How much ownership do you need, and what are the realistic odds of achieving the returns necessary to justify those investments? This is where most VC’s go wrong. Ultimately, you are only as good as your last deal. You have to track and make sure you are getting better at each of these – every quarter just like a start up would. If you’re an LP evaluating a fund, the important questions to ask are – 1) Are you seeing the best deals in the market? What are you doing to make sure you continue to see them. 2) How do you pick companies? Show us an investment memo? 3) Have you lost any deals, and if so, why? Found this useful? Let's continue the discussion in the comments. #vc #venturecapital #investing

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Founders like D2C. It’s just not a VC favourite. While D2C continues to be wildly popular among consumers, as is also clear from the number of D2C IPOs in India, there are mainly two friction points for VCs when investing in them. First, it’s tough to scale brands beyond INR 100 Cr ARR, especially given the poor brand loyalty and fierce competition in the space. These challenges eventually dilute the ROI and prolong exits for VCs. Second, the more the brands raise initially, the more they’re forced to grow later at any cost. This can result in distraction from the main business, severe cash burn, and funding issues. All in all, it is a good business for founders who don’t raise too much money and for folks with self-employment ambitions. Expecting a lot more consolidation in the space going forward - brands that do it well will scale.

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🚀 Is your startup losing time and money due to operational inefficiencies? I recently worked with an Indian footwear startup that’s creating eco-friendly, handmade shoes. What was their challenge? 👉 Production delays and missed deliveries caused by disorganized workflows. 💡 Solution: We identified inefficiencies in their process, aligned their team, and introduced simple tools to track progress and reduce errors. 🎯 Result: - Faster production timelines. - Improved customer satisfaction. - More bandwidth for the founders to focus on growth. The lesson? Efficient operations drive sustainable growth. —-------- Here are 3 frameworks to streamline operations in early-stage startups: 🔍 1. Analyze Your Workflows Start by understanding how each process works. Identify bottlenecks, repetitive tasks, and steps that add no value. Eliminate what isn’t essential. 💡 Tip: Create a visual map of your processes to clearly see where changes can have the most impact. —----------- 📋 2. Improve Team Communication Misalignment leads to delays. Regular updates, clear responsibilities, and open channels for feedback ensure everyone stays on the same page. 💡 Tip: A simple weekly check-in meeting can uncover issues before they snowball. —----------- 🤖 3. Leverage Technology to Save Time Use basic tools to handle inventory, track tasks, and manage deadlines. Automation reduces human error and frees up time for high-priority work. 💡 Tip: Start small with tools your team is comfortable with and expand as you grow. —----------- 💡 This is the 7th of 8 articles in my Startup Success series. Next, I'll be discussing "Building Standard Operating Procedures (SOPs) from the Ground Up." ------------- Hi, I’m Abhimanyu Gargesh and I mentor start-up founders to help them build efficient, scalable systems that support their growth journeys. 🤔 What’s the biggest operational challenge holding your startup back? Share it in the comments—I’d love to brainstorm solutions! #StartupWhisperer #Startups #Mentor #Operations #ProcessImprovement #BusinessChallenges

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The job of every startup founder is to will into existence boundless, generative emergence. To do so, you will have to face the demons of entropy, complacency, and ennui. If you succeed, you will birth a complex new entity; ideally, a prosperous and thriving ecosystem. You will make a dent in the universe. If you fail, you can start over again on second base.

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🚨Zepto Raises $665 Mn From Avenir, Lightspeed, and avra (Anu Hariharan new fund) at $3.6 Bn Valuation While startups are struggling to raise funding at a higher valuation, Zepto's valuation jumps ~ 2.5X -> 2024: Zepto bags the biggest fund raise in 2024 -> 2023: Becomes the first Indian startup to turn unicorn in 2023 #Zepto #Funding #Indianstartups #Quickcommerce #Valuation Inc42 Media (To read more, click the article link in the comment section 👇🏽)

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Exciting Developments in the Indian Budget 2024 for the Startup Ecosystem! 🚀 The Indian Budget 2024 has unveiled several groundbreaking measures that reflect a strong commitment to economic stability, growth, and innovation. Here’s a quick overview of the key highlights: ✅️ ₹5000 Crore Innovation Fund: A substantial new fund has been introduced to support innovative startups and extend tax benefits, providing a significant boost to the entrepreneurial ecosystem. ✅️ ₹1000 Crore Venture Capital Fund for Space Economy: The establishment of this fund demonstrates India’s forward-looking vision and positions the country as a leader in the emerging space sector. ✅️ Angel Tax Abolished: The removal of angel tax is a major step forward, eliminating a significant barrier for startups and investors. ✅️ Long-Term Capital Gains Tax Reduced to 12.5%: The new rate of 12.5% on long-term capital gains will enhance investment attractiveness and encourage more funding into startups. These measures are set to invigorate the startup landscape, drive innovation, and support long-term growth. As an entrepreneur and angel investor, I’m excited about the opportunities these initiatives will unlock for the startup ecosystem! For a deeper dive into these developments and their implications, check out my views in a detailed article in the Economic Times https://lnkd.in/g_znAT9r #IndianBudget2024 #StartupEcosystem #Innovation #EconomicGrowth #SpaceEconomy #VentureCapital #AngelTax #CapitalGains #Faad Aditya Arora Dr.Dinesh Singh Harshika Paliwal Shivani Khare Neha Mourya Vatsal Lunawat Abhilash Gupta Samarth Gupta Sanyam Jain

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