The Capital Connector for Entrepreneurs
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50-year-old Sandeep Singhal, who cofounded early-stage fund Nexus Venture Partners in 2006, is among the earliest known ‘species’ of venture capitalists in India.
The ex-McKinsey & Company guy, Singhal returned to India from the US in 1997 and co-founded early stage venture fund eVentures India in 1999 to fill the gap in risk capital availability. His prominent investments that gave stellar exits include CustomerAsset, Intigma and MakeMyTrip.
Singhal drafts few to-dos for entrepreneurs before betting on them – first, tell him why you are passionate about a particular thing and not just for the sake of it. Second, have a sense of purpose in doing things a better way. Third, must know how to sell your idea to everyone – investors, potential customers, business partners, employees, future investors etc. And fourth, have ability to listen particularly to his questions completely before you jump on replying. After all, the learnings in store from him are worth it. Here are Singhal’s three bets that are beginning to emerge.
Pratilipi Highlight – Customer Engagement
Singhal backed Bengaluru-based self publishing platform for everyone to read and write short stories, books, poems, articles etc., for free in nine languages, including Hindi, Bengali, Tamil, Kannada, Marathi, Gujarati etc. and connect authors to the readers. “They are seeing very good traction. The traffic is up by around three-and-a-half times and number of authors has increased by around four times since we invested,” he says.
Pratilipi fills the gap in the ability for people to express themselves in vernacular content. “This is clearly something needed in the market. The team is very passionate and capital efficient. They have built a very engaged community on both sides - the author and the reader.” Pratilipi has also solved the two challenges that content business has – reader engagement and monetization.
The cost of content creation is negligible because of a social network effect where authors and readers connect with each other even as readers over the time become authors too. “They are going after the next wave of the Internet population but it is still the early days,” asserts Singhal. But he is ready to back them again.
LifCare Highlight – Leverage Data
LifCare is another start-up in online pharma space delivering medicines to chronic patients. Singhal took lesser time to connect with the team as he had understood the companies doing similar business in the US. “I felt that LifCare team knows what was required in the long run to build a successful last mile pharmacy business,” says Singhal. Online pharmacies are continuously challenged with the question of why customers should buy from them when they have a neighborhood drug store.
But Singhal sees the disruption that data can bring similar to doctor consultation start-ups like Lybrate which is again backed by him. “There is a big role that data plays in this area which is not really tapped into. Lybrate, has the largest database today of questions and answers between doctors and patients in India. Same activity is happening in pharmaceuticals delivery.” That’s because online pharmacy is not just about the delivery aspect but what data is being recorded and used.
Goodbox Highlight – Connect Local Merchants With Customers
Goodbox solves the most pertinent problem for local or offline merchants – losing customers to online app-based businesses like Bigbasket, Grofers, and Amazon. The start-up provides a platform for such merchants to create a web presence and mini-apps for their businesses and sell directly to their consumers. Singhal has put $2.5 million in Goodbox, announced on December 2015.
“Apps like Grofers started by partnering with local merchants to offer delivery services to their customers but their eventual goal is to connect directly to consumers and replace the merchants.” Singhal sees positives for consumers including similar or better prices and service levels than apps.
Merchants don’t have to pay any rent as most of them own their shops or stores and have someone to do local delivery. “Goodbox helps merchants give the same user experience as these apps offer but it is a tough game as these apps businesses are well funded and discounting heavily.”
(This article was first published in the June issue of Entrepreneur Magazine. To subscribe, click here)