The Indian startup ecosystem has irreversibly changed over the last decade or so, drawing in numerous venture capitalists and investors who are ensuring that the environment is flush with funds.
In this scenario, Venk Krishnan, Founder of , a Bengaluru-based early-stage venture fund, stands out due to his investment thesis. The investor, who has been backing companies for the last 14 years, continues to bet on the people behind these ventures more than any other metric.
“My investment is mainly in people. I look at the passion of these entrepreneurs; how they go about solving a problem,” says Venk, adding that many of his investments are based on “gut feel”.
NuVentures would not typically be categorised as a venture capital fund or even an angel investor. It operates more like a syndicate with a network effect, where Venk leads the investment and is able to bring in other members who have money and expertise to offer to these young startups.
Venk is a technology entrepreneur, who ran his own company and has spent more than 15 years in the US. While there, he realised that there was “so much more that could be done back home” and returned to India in about 2007.
Today, his early-stage venture fund’s portfolio is chock-a-block with winners, including unicorns such as , , and soonicorns such as .
NuVentures portfolio
Backing founders
The philosophy of backing the people behind the venture has been a constant theme for NuVentures, which does not look at any specific sector. Venk quotes the example of his investment in MuSigma, a big data and analytics startup founded by Dhiraj Raghuram around 2007 and which is now a unicorn.
Venk says he was more impressed by Dhiraj’s passion about how big data and analytics could be a game-changer for businesses to make their decision. Especially since it was a time when these concepts were not in vogue.
The founder says the additional value that NuVentures brings to the table is the “network effect”. Given Venk’s experience in the world of technology, where he has built a network of people who are experts in a particular domain, he is able to bring their expertise to the young startups.
He speaks about a young cloud tech startup that needed access to markets where they could test their product. Venk was able to reach customers of his technology company in the US and convince them to pilot this startup’s product.
This is vital for it has typically been noticed that tech startups find it very challenging to get access to the market to test their product.
Venk’s experience also counts as he started investing in startups at a time when venture capital investment was not really the buzzword.
“When I saw the success of MuSigma, there was the realisation that something big could be built from India,” says Venk, adding that these small companies are actually the engines of growth, especially in the area of employment.
Sector-agnostic investment
As an investment house, NuVentures is sector-agnostic and has backed all kinds of startups, starting from consumer internet companies and tech ventures, and going on to craft beer ventures, content startups, and more.
Venk reiterates that he continues to stick with his philosophy of investing based largely on his gut instinct, and the fact if these startups can leverage technology to solve some really big problems.
“It is also important to understand if they can pivot in case of a failure,” he says.
He cites the example of his investment into , a retail outlet chain founded by young entrepreneurs who were back from the US and very passionate about coffee.
Venk says he had casually visited a Third Wave outlet near his office and immediately decided that he would invest in this company as he got “a feeling this would very different”.
In the present environment, where a considerable amount of capital is coming into the ecosystem and leading venture capital firms are also getting into early-stage funding, NuVentures is able to stand out on its own.
“It was always a question of how we can add value to these companies. As we get in very early into these startups (with some of them in the idea stages), NuVentures is involved in every major decision of the startup,” Venk says.
This translates into a lot of handholding for these startups by “getting into the operational aspects but without being overbearing”. To Venk, this means leveraging his connections in the broader ecosystem and tapping them to provide mentorship as well as additional capital.
“Our model has changed from pure investment to a more hands-on approach as we want to be part of their journey.”
Focus on India-centric problems
For NuVentures, a decade of investment since 2007 bore fruit in the 2017-18 time frame as many of the startups got into the next level of funding, either Series A or B. A couple of startups in their portfolio turned into unicorns, including MuSigma and Bigbasket.
Venk believes there are a couple more that has the potential to achieve a billion-dollar-plus valuation.
The fund size of NuVentures hovers around $7 million, but it has built a large syndicate where it is able to bring in additional investors.
Venk jokes that he even managed to convince a teetotaller investor to invest in a craft beer venture.
The founder believes there are enough wide spaces for startup investment in India and COVID-19 has actually thrown up newer opportunities.
“Today we look at startups solving India-centric problems and with a 10X approach leveraging technology,” Venk says.
He adds that the Indian startup ecosystem is on to something big and it is only expected to get bigger with newer ideas put into fruition as these startups are expected to be big engines of growth.
“I like this space and enjoy what I am doing. It is very exciting to be working with these founders as we learn a lot from them and they keep us very active,” Venk says.
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