In The Business Of Spotting Talent
The investments made by Chiratae Ventures in other firms brought great fortune to the companies. Almost 70 per cent of the firms reached its pre-COVID revenue levels
Chiratae Ventures has witnessed the change in the startup ecosystem pre-Covid and post-Covid. The companies that Chiratae Ventures and Sudhir Sethi invested have had a massive upturn in fortunes as 70% of the companies that the firm invested in were DeepTech and Sudhir believes that during the pandemic, these companies were serving a very deep need. He goes on to say that 70% of the companies crossed pre-COVID revenue levels. He was surprised as no one had expected such rapid growth given the fact that a pandemic was constantly in and out of flux. “We also had the same companies raise capital, but during 2020, these companies raised about $300 Million and during 21 total transactions in our companies probably has crossed I think $500 million so effectively we are seeing normal growth and we have now a run rate of $175-200 billion a year in investing terms so this will also not expected because this was growth from pre-COVID times overall so if I take the next year as such, we are talking about investing around $200-250 million.” The growth of DeepTech companies was unprecedented and with its rapid growth, the patterns started to reflect in other sectors as well like Healthcare, FinTech, the whole consumer space, etc. According to Sudhir, some of the consumer companies like PlayShifu, Firstcry, Lenskart started expanding internationally.
Policybazaar being their first portfolio company to go for an IPO, there are 7 others waiting in the pipeline. He is a firm believer that it is a great time for the start-ups as the market possesses quite a lot of capital. Chiratae Ventures and Sudhir Sethi are looking to raise $1.5 Billion in the next three and a half years as they look to launch their fifth fund which will subsequently followed by the sixth. The firm invests in technology companies that are solving real problems, which have a significant impact in business and society and they must obviously be giving outside financial returns. Chiratae is fundamentally making a big difference to the economy, not just in financial terms, but in value creation, in improving farmer income, in improving the inventory cycles and income levels of small to medium enterprises in the market space. Sudhir believes that the government had a huge part in this sudden boom of the startup ecosystem. “I think government has done a lot in funding the startup system through SIDBI.” Chiratae has been associated with its portfolio companies as well as exited one for somewhere between 7-12 years as he believes it takes the same amount of time to build capital. He knows there will be peaks and declines. He looked at 3000 companies this year and intends to target somewhere around 4000 companies next year. “The market is tougher for good companies that survive and the company in which the go to market the product is not there will actually die faster.” The founders during the pandemic put their head down, cut loose flaps as they were of the opinion that capital would not be available.
TOTAL NO. OF EXITS: 40
TOTAL ASSETS UNDER MANAGEMENT: ~$1 Billion