1Mby1M Virtual Accelerator Investor Forum: With Vishesh Rajaram, Managing Partner at Speciale Invest (Part 2)

Sramana Mitra: What was the second company? What sector was it in?

Vishesh Rajaram: I’m not going to name the second one too much. This is a company that was developing tools to enable developing 3D and VR content for e-commerce. They were acquired by a large retail e-commerce group. 

Sramana Mitra: Also in India?

Vishesh Rajaram: This was also in India. 

Sramana Mitra: What is your investment thesis? Are you looking for unicorns or are you proactively going after these early exit opportunities?

I’ll tell you where I’m coming from. In our conversations with investors, we see two distinct categories. One is the traditional venture capital world that is sticking to the traditional venture philosophy of chasing unicorns and going after billion dollar plus market opportunities and are looking to go the full length.

Then there are small funds. In the last five years, there are probably thousands of small funds that have come about. They have various positioning: seed, pre-seed, post-seed, pre-series A, small series A, and all kinds of different segmentation.

There is a category of investors that are going after small but quick exits. It’s a smaller exit but it’s a good multiple anyway. What is your fund’s investment thesis?

Vishesh Rajaram: Our investment thesis is getting companies to build value in a four to six-year timeframe. A couple of them exit early. We played along with what the founders wanted to do. By and large, the portfolio is going to be a mixed bag. There are a few that are going to exit early, a couple that you will use, and a couple that will build along the way. 

Sramana Mitra: Can you talk about your analysis on exits in India both for local acquirers and international ones?

Vishesh Rajaram: I like to break that down into a couple of sectors. We talk about commerce and consumption in one and enterprise and technology in the other.

Companies that fall under the category of the consumption bucket have had an early run. You have companies building products in that vertical since 10 to 12 years, and hence they have seen a variety of acquisitions, both local and international. They have also seen that international acquisitions are generally more enriching than local acquisitions.

We have seen a fair amount of activity on both those sides. We have had unicorns in the country. For companies in the enterprise stack, the local acquisition opportunity is fewer in number than in consumption. That is largely because more acquirers are in the US and Europe.

In those categories, you are not seeing as many exits as you have in consumption because you have fewer companies and there is a little bit of lag when these companies started and their point of maturity. I think we will begin to see a lot more acquisitions. 

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Vishesh Rajaram, Managing Partner at Speciale Invest
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