This Investor Believes Understanding Entrepreneurs is the Best Way for Investors to Manage Money
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Bhaskar Majumdar is an entrepreneur-turned investor. Currently, he is the founder and Managing Director of Unicorn India Venture, an early-stage venture fund that has made investments in 17 start-ups. Unicorn India Venture recently announced an INR 200 crore fund for investment in B2B, software-as-a-service (SaaS), robotics, among others, start-ups.
Understanding the Heart of an Entrepreneur
Majumdar says that conflicts between entrepreneurs are natural, and the main role of an investor is to guide and see that things are on track. He says, “Investors must understand the heart of an entrepreneur and walk with him/her no matter what.”
He gives the example of an entrepreneur in one of Unicorn India Ventures’ portfolio companies, who according to Majumdar, was “very very dynamic” but when it came to fundraising, things were a little scattered. “One day I told him to just forget the numbers and have dinner with me. And this very act made me understand what the issue was. It was a very simple thing. He just didn't have the time to do it because he was just busy running the shop.” Delving into the situation of this entrepreneur, Majumdar sent a team of analysts who came up with an investment plan for the entrepreneur and his company. In no time funds started pouring in for the company.
Some Hits and Misses
Hits and misses are unavoidable parts of everyone’s journey. It is true even for the likes of SoftBank. The Japanese conglomerate was seen as one of the marquee investors that would rule the start-up ecosystem of the world. It has the most iconic companies of the Silicon Valley and the world in its portfolio. When Silicon Valley-based Uber failed to put up a convincing show at the stock market and WeWork shelved its IPO, their key investor’s credibility was questioned incessantly.
While the whole world might be busy grilling SoftBank for answers but Majumdar is unfazed, “These things are cyclical,” and he also gives a rational to it. “Uber was being talked about because its shares were 30 per cent down from the listing price. But if you follow stock market, Facebook in the first one-and-a-half years was 50 per cent down and is today about eight times above the listing price.”
Majumdar cites the example of Roder that was a miss for the VC firm.
Unicorn India Ventures invested in an intercity cabs platform called Roder. Their business model failed after some time as they couldn’t compete with cab aggregator giants and Softbank-backed Ola and Uber that have grabbed a monstrous pie of the transport tech market.
“We took a call very early on and shut the business down,” says Bhaskar.
Fintechs proved to be the VC’s lucky mascot. Neobanking start-up Open and micro-lending platform Smartcoin could be added to the list of investments that have paid off for Unicorn India Ventures.
Cherishing One and All
Over the years, Unicorn India Ventures has invested in several companies—run both by young entrepreneurs, in their 20s, as well as, the matured lot in their 30s.
Consumer-led businesses, he says, are products of the younger lot who have “literally grown up in the digital world” and so their “consumption is based on the digital” aspects.
B2B businesses are domain specific and fit well with entrepreneurs who are in their 30s, mid 40s, according to Majumdar. Entrepreneurs in all generations add something valuable to the business ecosystem. He says, “Younger entrepreneurs are extremely ambitious, they know exactly what they want, though, they need a lot of hand holding, especially, in terms of organization building.”
An Interesting Phase
Majumdar says that it is an interesting time for Indian start-ups. Big guns of the investment industry such as SoftBank, Tiger Global, among others, are signing big cheques, an act which will help Indian start-ups “to go global”.
As a VC, Unicorn India Ventures has several plans in its pipeline.
Majumdar shares that in the coming times, the VC plans to focus of fintech, gaming and machine-as-a-service sectors.