With new startups coming out every week both in India and globally, iamWire reached out to startup investment expert Rajesh Sawhney, Founder GSF Accelerator, to hear his views on startups, angels, exit strategies and more.
How well stocked is the startup market in India?
It’s a nascent market which is developing very fast. The quality of startups is becoming better every year and the quantity is increasing too, but there are still miles to go if we compare it with the startup markets in US and China. Accelerator and investors movement is there, and it should reach an inflection point and have a critical mass in the next three years.
What are the opportunities for online retail startups in India?
There are a tremendous number of opportunities for online retail startups. While the large form retailing has been captured by players like Flipkart, Myntra, Jabong, Snapdeal etc., there are two spheres where the scope is great- first, having a mobile model and a social model, as their offerings will give an upper hand for differentiating from the existing companies. And secondly, there is an immense scope in hybrid model of retailing, i.e. where offline retailers are going online and online ones are setting up offline stores to create their market share.
Hence the next five years will see a lot of innovation in social, mobile and hybrid/omni-channel models of retailing.
What kind of startups does GSF incubate?
GSF is highly technology and product focused. Cloud and mobile are two key areas for us, which we believe will offer the best opportunity for Indian startups to go global, as GSF tries to help startups that have a global outlook and helps them in achieving that aim fast.
How challenging is angel investing in India?
Angel investor market is nascent in India, it started 5-6 years back, whereas VC scenario is robust and is seeing a lot of traction from VCs both in India and internationally. Angel investing is both very exciting and challenging. It is exciting because we are seeing formation of a large number of innovative startups in India. But at the same it’s challenging as not many angels have seen exits in the last few years, which freezes money that can be invested elsewhere. Bigger and better exits lead to better future investments.
Till which stage does GSF participate in its startups and what is its exit strategy?
We write the first institutional cheque for the startups after friends and family round i.e. a pre-seed round and participate in some startups up to Series A. GSF makes investments into companies with 3-5 years investment horizon, our idea is to either exit by sale of the company to a larger strategic player or when the company is able to raise a Series B.
Viki, the company you invested in as an angel in 2010, had a great exit to Rakuten, what advice will you give to startups from the lessons you learnt from it?
Besides selecting the right investors, there are three pointers that all startups should follow to have a successful company. Firstly, build a globally scalable business; secondly have an awesome team & idea and finally, don’t be afraid to explore uncharted territories.
Meet Rajesh Sawhney at #IRE2014 and hear his views on how mobile is going to be the next big thing in online retail.
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