Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Anirudh Suri was recorded in December 2017.
Anirudh Suri, Founding Partner at India Internet Fund, talks about the funding trends in the Indian startup market.
Sramana Mitra: Help us introduce you to our audience. Tell us about your fund and investment focus. How big is the fund? What size investments do you make?
Anirudh Suri: We are an early stage seed to Series A fund. We invest primarily in technology-based ventures. Typically, investors will come in right after the family and friends round and before a larger venture capital fund comes in for the Series A or a Series B. We end up being the first institutional investors in a venture.
Sramana Mitra: How big is your fund?
Anirudh Suri: Across US and India, we are about $65 million. In India, we’ve done 15 investments so far across different sectors. This includes everything from vertical e-commerce, media & entertainment, music apps, Big Data analytics, advertising technology, and travel.
Sramana Mitra: Typically, what is the size of investment?
Anirudh Suri: We typically invest anywhere between $50,000 to $100,000 on the lower end to about half a million on the top end as our first investment into a company. We might follow-on with more capital as the company evolves.
Sramana Mitra: You said India and US. Can you elaborate a little bit? Are you looking at funds that are Indian-market facing, global market facing, US market facing? Where do they need to be based?
Anirudh Suri: It’s a bit of all of that. The main dimension is, there has to be an Indian angle to the company. That could mean that the company is based out of India targeting the US market. It could also mean that the company is based in the US but is targeting the Indian market. It could mean that the company is based in India and targeting a global market.
We really have India at the core. Beyond that, the company could be focused on any market outside of India as well. If you look at our investment so far, about five or six of them are actually based out of the US. The others are mostly based out of India. We have a couple of investments that are based out of Hong Kong and Sri Lanka.
Sramana Mitra: Talk to us about your current portfolio. What are the highlights? What have you invested in? Can you also provide some analysis on why you’ve decided to invest in those companies.
Anirudh Suri: I’ll talk about some of our existing companies first. One of the companies that has done really well is a company called Tala which is based out of Los Angeles. They have been focused on the Indian market but also expanded beyond the Indian market to countries like Kenya and Philippines. They are primarily a FinTech startup. They have subsequently raised money from Google and Lowercase Capital.
They, primarily, started off as a company that started to build credit scores for the un-banked. All of us know that there are credit agencies out there that are building credit scores for people with banking accounts. There is a big gap in the global market for building credit scores for the un-banked. There are no clear ways for building credit scores for that segment and there are a lot of people who are looking to lend to that segment.
This company started using multiple datapoints that they were gathering from people’s mobile phones, how many times they’re getting their phones recharged, and how often they are paying their mobile phone bills on time. Now they’ve evolved to lending on their own as well.
Sramana Mitra: They are turning into a financial institution.
Anirudh Suri: We were one of the first few investors of the company along with Eric Schmidt from Google. Now the company has gone on to raise three rounds since, the last round being a $25 million round. They’re doing very well. The reason why we invest in them is the entrepreneur and the team. For many investments, that’s often the very first hook. The second reason was the problem itself. We thought that the problem was very pertinent.