Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Suresh Shanmugham was recorded in May 2018.
Suresh Shanmugham, Managing Partner at Saama Capital, talks about the Indian venture capital eco-system, trends, exits, and his firm’s investment strategy.
Sramana Mitra: What we’re going to do is get to know you and help our entrepreneurs, in particular, get to know how you think about investments. Tell us about your fund. Tell us about what your investment focus is.
Suresh Shanmugham: Saama Capital is an India-focused venture firm. We got our break back in 2006 when the team was part of Silicon Valley Bank. We were the India team at SCB. We raised a pool of capital in 2006 to 2007 and began our investment journey there. We are primarily early-stage investors.
We have since spun out of Silicon Valley Bank. That happened in 2012. We rebranded to Saama Capital. We’ve raised three funds under the Saama Capital name, our most recent one being Saama Capital Four, which is a $100 million fund that we wrapped up about 45 days ago.
Sramana Mitra: What sized investments do you like to make?
Suresh Shanmugham: Our initial check size will vary. If we’re doing something at the seed level, which we’ll do on an opportunistic basis, it’ll be in the half a million to a million range. We’re more apt to do pre-Series A and Series A investments that are in the $2 million to $4 million range.
Sramana Mitra: What about industry sectors? What do you like to invest in?
Suresh Shanmugham: One thing that we’ve always been very committed to is being fairly diversified from a sector standpoint. We have invested across a broad range of industries. All of our investments have a strong India connection to them. Part of the thesis is about benefiting from the economic growth that is happening in India. We’ve invested in a wine company, e-commerce, enterprise software, and education. It’s a fairly broad range of opportunities that fall within our mandate.
Sramana Mitra: Let’s double-click down on some of your portfolio companies. What have you invested in? What was the thinking behind those investments? This will give our audience an insight into how you look at deals.
If you’ve had exits, you can talk about exits because in India, the exit question is a big question. Today, we are speaking a day after a major event on the exit front – Flipkart being acquired by Walmart.
Suresh Shanmugham: No doubt. It’s been rumored for a number of weeks now. It’s great to get the confirmation. If I take a look across our portfolio, a couple of the companies in fund one will give you a flavor of some of the things we’ve invested in. We were an early investor in Paytm back when it was still a mobile value-added services company.
One of the things that attracted us to that business was really the founder. That’s a theme that you’ll find across the investments that we’ve made. The founder’s vision was impressive. We were Series A investors there. It’s been a long time and a strong journey with him. The pivot happened there in the 2011 to 2012 timeframe where Vijay took it from a mobile VAS company to payments. That has led to the tremendous growth and market value creation over the last five years.