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Why Bessemer cooled to tech investments in India

Anand Sridharan, Associate at Bessemer Venture Partners’ Mumbai office, has laid claim to the title of “India’s first VC Blogger”, by kicking-off "Seriously Clueless", a new blog at http://radventure.blogspot.com.


Anand Sridharan
(Photo Source : Business Today)


Anand has made a great start by providing readers an insider’s account of how he and his colleagues have localized their firm’s approach to investing in India.

The easy answer would have been to continue doing what we do in the US – invest in early-stage, IP-led, technology companies. As we spent time on the ground, we realized that the ecosystem for such companies – seed funding, mentors, a thriving domestic tech market, critical mass of people with product-lifecycle experience – doesn’t yet exist. At the same time, domestic demand growth is fueling several successful companies in a range of non-tech sectors. These aren’t necessarily IP-led companies, but are certainly built on strong execution and process capabilities.

So, if not tech, what else would interest Bessemer? In a detailed follow up post, Anand provides insights into how is likely to go about finding "the next Bharti".

An extract:
(1) Stick to basic needs
It will take us a while to get to self-actualization needs. Health spas, blogging and other self-indulgent pastimes will remain pastimes, not businesses. Billion $ businesses are most likely in food, clothes, basic infrastructure (roads, houses, health, education), communication, transport, household goods.

(2) Think utility, not fun
Middle-class Indian households are used to an all-encompassing entertainment budget of $1/month/head for unlimited cricket, news, songs and movies. And this even includes the EMI on the TV (in addition to the cable bill and a newspaper subscription). No one is in a hurry to pay $5 a pop for a mobile phone game.

Here’s hoping Anand will continue his initial enthusiasm and great start.

Arun Natarajan is the Founder of Venture Intelligence India, which tracks venture capital activity in India and Indian-founded companies worldwide. View sample issues of TSJ Media's Venture Intelligence India newsletters and reports.

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