Sramana Mitra: What about sectors? Of course, India has gone through a lot of different cycles already in terms of sector popularity and experiments. So what are your conclusions and investment thesis around sectors at this point?
Nandini Mansinghka: That’s a very interesting question. We’ve seen a slight shift in the trend over the years. So if you look at our portfolio of 130 companies, we were focusing a lot on tech and tech product companies because the hypothesis was that we need to look at startups in a similar way as the Valley. Over the last three to four years, we’re seeing a distinct change in how they are being looked at.
There are some sectors that are getting a lot more traction. This could be food companies. These are food apps. We’ve actually invested in a tea company, a parfait company, and a chip company. Indian consumers will be the big one that we started seeing as a trend.
We’ve also seen a lot of interest in what you can classify as healthcare and life sciences – health tech and med tech. But that’s another one that’s coming up. When we say health tech and med tech, we’re talking of companies that are solving problems for the Indian consumers. How do you make healthcare accessible to the common man? For example, we’ve just invested in a company that can detect if you have tuberculosis or not just by coughing into the mobile phone; just by the sound of the pump. You’re doing it at a fraction of a cost of another way of detection.
We’ve seen several such companies coming to us. Then, of course, there are other deals. For example, we have a drone company that’s looking at solar panels. We have a battery company that can recharge a mobile phone battery at a fraction of the cost of any other invention. Those are the other businesses. These are the three buckets where we’re seeing a lot of traction.
Sramana Mitra: With your tech, what is your analysis of the Software as a Service (SaaS) market? Of course, India has gone very big into software service. The VC’s have gone big into it. It plays naturally to India’s strength because of such a large software programmer population and many of them have turned into entrepreneurs. SaaS is the easiest thing for them to do because they can code and they can acquire a few customers and get moving. What is your analysis of that segment?
Nandini Mansinghka: From our perspective, we haven’t seen too many deals happening in that segment. I think this could be a problem of planting. It might be easier to start a service labor. But you’re not able to actually demonstrate how you are different or how you’re actually solving the real problem. That’s one we see.
The other thing is that these companies require a much larger amount of funding than what we are looking at. We haven’t seen too many companies come in. We haven’t really seen too many of them gain traction. Having said that, I see that at any given point of time there are at least 50% of companies that are switching to us.