1Mby1M Virtual Accelerator Investor Forum: With Anirudh Damani, Managing Partner at Artha Venture Fund (Part 6)

Anirudh Damani: However, India continues to be a very price-conscious market. India is not usually the place where you come to have massive profits. You get massive scale but not massive profits. When you go overseas like Africa or Southeast Asia, there are two parts of the world holding close to two billion plus people that are willing to pay much higher amounts than what you would be charging in India.

There’s a willingness to pay four times more in some cases. That’s the reason why a lot of these platforms are looking at Southeast Asia, Africa, and Europe. They see a massive increase in revenue just by being overseas.

Sramana Mitra: The India-Silicon Valley tie has been very strong for a long time. We do see a lot of the companies starting in India and then setting up their headquarters in San Francisco or the Bay Area.

I’m very interested in what you’re saying about Indian companies selling to Africa and Southeast Asia. They’re underserved markets. The profit level is not going to be as much as in the US. Customer acquisition is much lower. It makes a lot of sense for a lot of Indian startups to go into those markets. I think you’re saying that it is starting to happen more.

Anirudh Damani: Absolutely. I think there’s also a stronger cultural connection with the African subcontinent. Indians have been there for several generations now. It’s much closer to them in terms of time zone. Between Silicon Valley and Singapore, the time zones can be fairly wide. If you’re billing in USD, as the currency depreciates, the cost increases.

Sramana Mitra: The other question is about the rest of India. We know that Bangalore has developed very well. We know that Delhi NCR has developed really well. What are you seeing in your deal flow from the rest of India?

Anirudh Damani: We just completed our first investment in a company based out of Dehradun. We invested in the largest startup hotel multi-brand chain across the northeast. We are active in that ecosystem. The best values come from where people aren’t looking. Most of our portfolio is concentrated across the north.

We’ve done a number of investments in Bombay and surrounding areas. Probably 25% of our portfolio is in Bangalore. We are always looking for value where nobody is seeing it at the moment. That’s helped us build out a diverse portfolio across the subcontinent.

Sramana Mitra: You said earlier that the deal flow has exploded and you have introduced an additional filter of referral. If you don’t put on the referral filter, what is the size of the deal flow?

Anirudh Damani: Probably about 200-plus deals a week.

Sramana Mitra: So you’re seeing about 10,000 deals a year.

Anirudh Damani: Easily.

Sramana Mitra: How many startups do you think are operating in India right now?

Anirudh Damani: Probably close to 10,000 to 12,000.

Sramana Mitra: Very interesting. We’ve been doing the Indian startup ecosystem for a long time now. I did the first company in the Indian startup ecosystem and there was no Indian startup ecosystem. It started to come together in the late 2000s. It’s been a very robust growth.

Anirudh Damani: My team says that the Indian government has its own database of startups. According to that database, there are 77,000 registered startups in India. That’s a very big number.

Sramana Mitra: It’s been a great pleasure talking with you. Thank you for your time.

This segment is part 6 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Anirudh Damani, Managing Partner at Artha Venture Fund
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