Seed Investors In India: Why So Few?

As I have written in previous columns, the seed capital ecosystem in India is a real bottleneck right now. There are no more than a couple of hundred seed investments that are happening a year. Even if the number doubles this year, it is still a terribly inadequate number to build a real pipeline of hundreds of thousands of entrepreneurs that can meaningfully impact the country.

How can we change this?

To answer that question, we need to first understand why there is such a shortage of seed money in the Indian IT entrepreneurship ecosystem.

You see, Silicon Valley’s angel investors were all either entrepreneurs themselves, or part of an entrepreneurial venture that succeeded sufficiently for its early employees to make significant money. Most of them went through the experience of building a technology product, taking it to market, watching it take off in the market, and then reaping the benefits of that success.
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How To Navigate the Seed Capital Gap in India

Even though interest in entrepreneurship is at its highest in India, the country has a nominal seed capital infrastructure. As you know, I concern myself with issues of scalability and pipeline building. The question that I have been pondering for the last ten years is: how do you develop a sustainable pipeline of entrepreneurs?

Of course, this discussion pertains to my field: IT and IT-enabled services. India has numerous small retailers, service providers, etc. who are shining examples of scrappy entrepreneurship at its best.

But how do we take advantage of the increasing penetration of information technology into the consumer and business populations in India? And how, through technology, do we empower Indian entrepreneurs to build global businesses?
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1Mby1M Incubation Radar 2013: Kobster

The Indian ecommerce market has attracted many a retailer. In particular, niche sectors like office supplies that has an annual growth rate of 15 to 20% is attracting quite a few ecommerce ventures. One such ecommerce startup is Kobster.com, a one-stop e-destination for office supplies.

In the highly unorganized office supplies market, Kobster provides an online platform that makes it easy for companies and educational institutes to procure a wide range of office supplies, furniture, customizable stationery and gifts. With doorstep delivery, flexible payment options such as cash on delivery, and the convenience and efficiency of online shopping, Kobster aims to eliminate the need to engage with multiple vendors and end the office supplies procurement nightmare.

Kobster was founded in July 2012 by three college friends, Karthik Ramaiah, Mohan Gayam and Vineet Neeraj. Vineet, a former software developer with Cognizant, manages the marketing and sales aspect of the business. He had earlier launched an event services startup, Yippie, followed by a product startup, ArrayShield.  Karthik, a former Java developer at Cognizant handles all the technical aspects as well as customer support, while Mohan, a former HCL Technologies employee, is responsible for the product catalog and ensuring best deals from suppliers.
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BookMyShow Is Booking Its Way to Profits

According to a recent report by Internet and Mobile Association of India (IAMAI) and IMRB International, the Indian e-commerce market is expected to grow 33% this year to Rs. 62,967 crore (~$7.5 billion). The market remains dominated by the online travel segment, which contributes 73% of revenues for the year. The remaining 23% comes from other categories, such as online retail and classifieds. Event ticket sales are thus a very small share of the Indian e-commerce landscape, but local portal Bookmyshow.com is making big news in the industry.

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Trend Spotting: Indian Outsourcers Coming To Rescue American Youth

I recently had a very interesting conversation with Wipro’s Roop Singh that made me stop and observe the subtle irony of what’s happening in the Indian outsourcing industry.

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The Indian Startup Eco-System Wants Acqui-hiring!

I spent large chunks of time in the last two days with my friend Sharad Sharma, one of the true deep thinkers of the Indian startup eco-system. I first met Sharad when he invited me to co-chair the Nasscom Product Conclave in Bangalore with him in 2010. I really enjoyed working with him, and over the years, have come to appreciate what he is trying to do for the Indian eco-system.

Sharad, by the way, is one of the 20 odd effective angel investors who invest in the technology sector in India. While the total number of angel investors is much larger, many of them come from outside the sector, and hence are not capable of leading deals. If you look at Indian Angel Network or Mumbai Angels, for instance, a vast majority of the angels made their money elsewhere (like real estate), and often find it difficult to fully grasp what’s happening in the software, mobile or Internet businesses, let alone networking or semiconductor. Thus, these lead angels are critical for the eco-system to mature.

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Entrepreneurship in Bengal: A Blueprint for India’s Next Stage of Development

You have heard much about Jyoti Basu’s Bengal, Mamata Banerjee’s Kolkata, and various other dysfunctional views of the erstwhile capital of British India. Today, I am going to introduce you to Abhishek Rungta’s Kolkata, Pallav Nadhani’s Kolkata, Bimal Patwari’s Bengal, Srish Agarwal’s Bengal, and Arijit Bhattacharyya’s Bengal.

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Concept Arbitrage

Over the last 18 years, since the Internet became a commercial phenomenon, many experiments have taken place. Many businesses have been built. A large number of them have had their origins in Silicon Valley. Some have come from other parts of the United States. A few, like Skype, have come from unlikely places such as Estonia.

Also, during this time, we have seen a great deal of concept arbitrage: the replications of successful ideas in different geographies.

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