1Mby1M Virtual Accelerator Investor Forum: With Sasha Mirchandani, Managing Director at Kae Capital 2020 (Part 2)

Sramana Mitra: You talked about the investor trends. Let’s talk about the sectors and the types of industries that have done well. There are several in the wings right now that are going public in the US. Druva is going to go public probably next year. Freshworks is going to go public relatively soon. There are others in the background. Of course, the whole e-commerce world has done well. How do you summarize the sector trends? How do you view the sector trends? What is your current investment thesis by way of sector trends? What did COVID do to the Indian startups?

Sasha Mirchandani: If I step back and look at the early part of the 2000s when we started, we were looking primarily at two categories. Consumer tech is one. India is a large enough market to build large companies in the tech space.

We were primarily focused on the new tech space. We had a small piece for B2B, SaaS for B2B analytics, B2B cloud, and companies born in Chennai and Mumbai in India and mostly moving to San Francisco or New York City. That was the bulk of our investment – 70% to 80% consumer tech companies because India has a fast-growing consumer tech market as you can imagine.

At that point, you could think of India as a hybrid between the Chinese and the Israeli market. Our B2B businesses had to go global to build scale while our consumer tech companies could build large enough companies like Flipkart. That’s what we did for the longest time.

Now, we are expanding to interesting categories like consumer brands. We’re now seeing that you can get venture scale returns in consumer brand businesses, and we have some very interesting companies in our portfolio that can prove that. We are also seeing the B2B enablement of SMEs. That’s a huge opportunity within India itself.

Some of our best companies now are coming out of that category. It’s an exciting space. For the longest time, we never looked at companies within the B2B space in India but now that’s exploding.

We are pleased to report that we have some very exciting categories. Consumer tech in India is a very nascent market. This includes consumer brands and SaaS. SaaS is now becoming a very strong focus for us. We’ve done far more SaaS coming into the second fund than the first one. That experiment worked out nicely. Of course, the B2B India story is very exciting as well.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Sasha Mirchandani, Managing Director at Kae Capital 2020
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