This Global Investor Terms Startups Opting for an IPO a Kiddish Move
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Yet again, it’s time to look back at the report card of the whole year to see what hit headlines in the business community, who is the disruptor of the year or which sector has witnessed the maximum number of investments.
In an interview with Entrepreneur India's Editor-in-Chief Ritu Marya, John Dougery, Co-founder and Managing Director of Inventus Capital Partners gave us an optimistic and incisive view of the investment community and what they are looking forward to in 2018.
Which sectors will get the maximum investment in the US and other countries like India?
I have noticed that the business community has a lot of trust in Intelligence Automation, Artificial Intelligence, Machine Learning etc. Technology and automation are the building blocks for business owners today. Business functions that hitherto were being driven by manpower, are now getting the support of technology.
Companies in the manufacturing sector are automating their work. The scenario is somewhat the same even in the medical sector, where machines are taking over skilled humans.
I think, in the coming years, the adoption of technology will be three times more than what it is now. 2018-19 will see more mainstream adoption of these kinds of technologies.
Sectors that interest you?
We are big believers of data analytics, machine learning and artificial intelligence. We are looking for companies that have a lot of data, anything that involves imaging technology. We also have plans to go public very soon.
Where do you spot investments in the consumer market?
It’s kind of a transitional period for the consumer services sector.
There’s a wave of mobile-enabled consumer services and the sector has matured considerably over the years. The services on e-commerce platforms are going to be voice-driven now. In fact, the whole interface of e-commerce websites is going to be changed. You will be able to converse with sellers on websites to order something at your home. That’s the technology we want. Like Amazon’s Alexa, other companies are also going to use this tool to engage with customers in a more personalized way. Scrolling on your smartphone and desktop will no longer be the part of your life.
There are a lot of startups going public in India and US. Do you think it is right move for a startup exit?
In the American IPO market, it requires much more tremendous scale to go public. You have to have 100-200 million scaling revenues. I believe the scale requirement is much more significant today.
Companies like Snapchat and many other startups have not done well in public. Snap’s shares fell down to an all-time low. If you look at their market capital they are good but if you see their stock capital you would be disappointed. I think going public is kiddish of startups. They should get over that as soon as possible.
Rather than start-ups, there should be some solid companies entering the stock market. More scale, more size, more revenues and more significant leadership is the need of the market.
People often question why Apple and Facebook couldn’t do it. According to me, it’s a silly question. Companies know what is best for them. And for Facebook or Twitter, I think there’s more fear than reality.
There are other software companies which are high in reach and have gained a strong momentum. They have proven themselves with not just their successful IPOs in market, but also with a rising capital. They don’t get as much attention as consumer companies do but those companies are growing substantially in the stock market as well.
Do you see similar trends for India too?
Our belief is that in the last 5 years, India has become a global hub of customers. Product based companies are going to be substantial. Companies like Fresh Desk, Droova and many others are growing substantially. In India, lots of companies are giving up on the legacies and are adopting advanced technology to change the model.
India has a great talent pool. The number of people you can hire in the US, here you can hire 6 times more people. Almost every sector today is using technology in its functioning.
What is barring the growth of the companies even with low cost of labour in India?
For growth of any company, the basic fundamental has to be very good, which is product. When you are good with all these things, then you can think about human resources, machine installment and other things.
I think the hard part of consumer market is the newness in their product. You ensure better services, but at the end your product is everything. If you don’t have a good product, then you are not going to grow.
Can you name some countries that are going to be seen in future years?
Indonesia has a substantial size market in Asia. What I have heard and read about Indonesia is quite impressive.